John's demand schedule for pizza is indicated below.If the current price of pizza is $1.10 per slice,what is John's consumer surplus if he buys five slices of pizza?

A)$0
B)$1.00
C)$1.10
D)$6.50

Question

John's demand schedule for pizza is indicated below.If the current price of pizza is $1.10 per slice,what is John's consumer surplus if he buys five slices of pizza?

A)$0 
B)$1.00 
C)$1.10 
D)$6.50

Quizplus · Accepted Answer

To find the consumer surplus, we need to find the difference between the total amount John is willing to pay and the total amount he actually pays.
At $1.10 per slice, John is willing to buy 5 slices of pizza, which gives him a total willingness to pay of $6.50 ($1.50 + $2.00 + $1.50 + $1.25 + $0.25 = $6.50).
If John buys 5 slices at $1.10 per slice, he would be paying a total of $5.50 ($1.10 x 5 = $5.50).
Therefore, John's consumer surplus is $1.00 ($6.50 - $5.50 = $1.00), which means he is getting an additional $1.00 worth of value from the purchase. Answer choice B is correct.

John's Demand Schedule for Pizza Is Indicated Below