Two Economists from Northwestern University Estimated the Benefit Households Received

question 147

Multiple Choice

Two economists from Northwestern University estimated the benefit households received from subscribing to broadband Internet service.They found that in the year they analyzed,47 million consumers paid an average of $36 per month to subscribe to a broadband Internet service,and estimated the value of total consumer surplus for these subscribers was equal to $890.5 million.Based on these numbers,what was the average monthly consumer surplus per subscriber for broadband Internet service?

• A)$0.05
• B)$0.77
• C)$13.06
• D)$18.95

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the sensitivity of demand to changes in price.

Demand Schedule

A table that lists the quantity of a good a person will buy at different prices.

Demand Schedule

A table or graph showing the quantity of a product that consumers are willing and able to purchase at various prices over a specified period of time.

Law Of Demand

The principle that, other things equal, an increase in a product’s price will reduce the quantity of it demanded, and conversely for a decrease in price.