Consider the market for socks.The current price of a pair of plain white socks is $5.00.Two consumers,Jeff and Samir,are willing to pay $7.25 and $8.00,respectively,for a pair of plain white socks.Two sock manufacturers are willing to sell plain white socks for as little as $4.00 and $4.15 per pair.How much is total consumer surplus in this market?
A) $2.25
B) $3.00
C) $0.75
D) $5.25
E) $15.25

Question

Quizplus · Accepted Answer

The highest willing to pay (WTP) is $8.00 and the lowest selling price (LP) is $4.00. Thus, the total consumer surplus for both Jeff and Samir is:
Jeff: $7.25 - $5.00 = $2.25
Samir: $8.00 - $5.00 = $3.00
Total consumer surplus = $2.25 + $3.00 = $5.25

Consider the Market for Socks