Scenario 12-3
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-3. Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9. What is Regina's consumer surplus from cheesecake?
A)zero
B)$2
C)$3
D)$6

Question

Quizplus · Accepted Answer

Regina would only buy a slice if the price is $8 or less. With the new price at $9 due to the tax, she will not buy any cheesecake, resulting in a consumer surplus of zero.

Scenario 12-3 Suppose Roger and Regina Receive Great Satisfaction from Their Consumption