Josh is willing to pay $500 for a set of tire,but he is able to pay $300 at the local tire store.His consumer surplus is
A)$800.
B)$300.
C)$200.
D)$500.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount that a consumer is willing to pay and the actual price they pay. In this case, Josh is willing to pay $500 for the set of tires but is able to purchase it for $300, which means his consumer surplus is $200 (i.e., $500 - $300). Therefore, the best choice is C.

Josh Is Willing to Pay $500 for a Set of Tire,but