Use the following for questions 111-115.

-(Exhibit: The Demand for Golf Balls) Assume that 4 dozen golf balls are purchased for $12 per dozen.Consumer surplus is:
A) $1.
B) $4.
C) $9.
D) $16.

Question

Use the following for questions 111-115.
  
-(Exhibit: The Demand for Golf Balls) Assume that 4 dozen golf balls are purchased for $12 per dozen.Consumer surplus is:
A) $1. 
B) $4. 
C) $9. 
D) $16.

Quizplus · Accepted Answer

Consumer surplus is calculated as the area of the triangle above the price level and below the demand curve. In this case, the base of the triangle is 4 dozen (the quantity purchased) and the height is $4 (the difference between the highest price the consumer is willing to pay, $16, and the price paid, $12). Thus, the consumer surplus is 1/2 * base * height = 1/2 * 4 * 4 = $8. However, since the question specifies the purchase of 4 dozen, implying the calculation should consider the total surplus across all units, the correct calculation for total consumer surplus is the area of the entire triangle, which mistakenly led to the selection of D) $16. The accurate explanation involves recognizing the calculation error: Consumer surplus should indeed be calculated as the area of the triangle, but the correct interpretation of the given information leads to a different numerical answer, indicating a mistake in the initial calculation process.

Use the Following for Questions 111-115