Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke.
-Refer to Table 7-2. If the market price is $3.80,
A)David's consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50.
B)Megan's consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80.
C)David, Laura, and Megan will be the only buyers of Vanilla Coke.
D)the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal.

Question

Table 7-2
This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. 
-Refer to Table 7-2. If the market price is $3.80,
A)David's consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50. 
B)Megan's consumer surplus is $1.70 and total consumer surplus for the five individuals is $9.80. 
C)David, Laura, and Megan will be the only buyers of Vanilla Coke. 
D)the demand curve for Vanilla Coke, taking the five individuals into account, is horizontal.

Quizplus · Accepted Answer

To find the consumer surplus for Megan at a market price of $3.80, we need to find the maximum amount she is willing to pay, which is $5.50. Therefore, her consumer surplus is $5.50 - $3.80 = $1.70. The total consumer surplus for the five individuals would be the sum of each individual's consumer surplus at the market price, which is $1.80 + $1.70 + $4.70 + $1.10 + $0.70 = $9.80. We cannot determine the demand curve or which individuals will be buyers based on the information given.

Table 7-2 This Table Refers to Five Possible Buyers' Willingness to Pay