Priscilla is willing to pay $65 for a new pair of shoes

Economics Dec 23, 2020

Priscilla is willing to pay $65 for a new pair of shoes. Pandora is willing to pay $50 for the same shoes. The shoes have a price of $45. What is the total consumer surplus for Priscilla and Pandora?

a. $15

b. $20

c. $5

d. $25

e. $35

Expert Solution

The total consumer surplus is d. $25

Consider the following table:

	Priscilla	Pandora
Willingness to pay	$65	$50
Actual price	$45	$45
Consumer surplus	$65-$45=$20	$50-$45=$5

Therefore, the total consumer surplus is:

CS=$20+$5=$25

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