Wednesday, July 8th, 2009

Consider the market for antique cars. The market price for each antique car is $120,000.?

Assume that all buyers demand only one car.

Jill is a consumer with a willingness to pay of $120,000. Given the market price, how much consumer surplus does she receive from purchasing an antique car?

Consumer surplus is the difference between the amount that consumers actually pay and the amount that they would have been willing to pay

Since she is willing to pay exactly the market price, there is no difference. consumer surplus is zero.

One Response to “Consider the market for antique cars. The market price for each antique car is $120,000.?”

geoff_hazel Says:

Consumer surplus is the difference between the amount that consumers actually pay and the amount that they would have been willing to pay

Since she is willing to pay exactly the market price, there is no difference. consumer surplus is zero.
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