Question

Trevor is willing to pay $22 for the dvd of a newly released movie, but the market price for the dvd he wants is only $10. what is his consumer surplus?

Answer 1

The consumer surplus is $12.

What is the consumer surplus?

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

Consumer surplus increases when there is a decrease in the price of the good. Consumer surplus decreases when there is an increase in the price of the good.

When consumer surplus is depicted on a graph, it is the triangular area between the price of the good and the highest amount consumers are willing to pay for the good.

When consumer surplus is added to producer surplus, the result is total surplus

Consumer surplus = willingness to pay – price of the good

$22 - $10 = $12

To learn more about consumer surplus, please check: https://brainly.com/question/25816093

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