Scenario 12-2
Suppose that Bob places a value of $10 on a movie ticket and that Lisa places a value of $7 on a movie ticket. In addition, suppose the price of a movie ticket is $5.
-Refer to Scenario 12-2. Suppose the government levies a tax of $3 on a movie ticket and that, as a result, the price of a movie ticket increases to $8. What is total consumer surplus after the tax is imposed?
A)$0
B)$1
C)$2
D)$3

Question

Quizplus · Accepted Answer

Bob's consumer surplus is $2 ($10 value - $8 price), and Lisa's consumer surplus is $0 ($7 value - $8 price). Total consumer surplus is $2.

Scenario 12-2 Suppose That Bob Places a Value of $10 on a on a Movie