Kelly is willing to pay $5.20 for a gallon of gasoline.The price of gasoline at her local gas station is $3.80.If she purchases ten gallons of gasoline,then Kelly's consumer surplus is
A)$1.40.
B)$14.
C)$3.80.
D)$52.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the price a consumer is willing to pay and the actual price they pay. In this case, Kelly is willing to pay $5.20 per gallon but only pays $3.80 per gallon.

Her consumer surplus per gallon is $5.20 - $3.80 = $1.40.

If she purchases 10 gallons, her total consumer surplus is:
$1.40 x 10 gallons = $14.

Therefore, the best choice is option B.

Kelly Is Willing to Pay $5