Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound,
A)Henry experiences an increase in consumer surplus, but Janine does not.
B)Janine experiences an increase in consumer surplus, but Henry does not.
C)both Janine and Henry experience an increase in consumer surplus.
D)neither Janine nor Henry experiences an increase in consumer surplus.

Question

Quizplus · Accepted Answer

Both Henry and Janine experience an increase in consumer surplus because the price drop from 50 cents to 40 cents makes bananas cheaper than what each was willing to pay, thus increasing the difference between their willingness to pay and the actual price.

Henry Is Willing to Pay 45 Cents, and Janine Is