Elvis values the first gravy sandwich at $5, the second at $4.50, the third at $4. If he buys three for $4 each, his consumer surplus has a value of:
A)$5.
B)$4.
C)$1.50.
D)$9.50.
E)$12.

Question

Elvis values the first gravy sandwich at $5, the second at $4.50, the third at $4. If he buys three for $4 each, his consumer surplus has a value of:​
A)$5.
B)$4.
C)$1.50.
D)$9.50.
E)$12.

Quizplus · Accepted Answer

Consumer surplus is the difference between what a consumer is willing to pay and what they actually pay. Elvis values the sandwiches at $5, $4.50, and $4, totaling $13.50. He pays $12 for three sandwiches ($4 each), so his consumer surplus is $13.50 - $12 = $1.50.

Elvis Values the First Gravy Sandwich at $5, the Second