Suppose Katie,Kendra,and Kristen Each Purchase a Particular Type of Cell

question 8

Multiple Choice

Suppose Katie,Kendra,and Kristen each purchase a particular type of cell phone at a price of $80.Katie's willingness to pay was $100,Kendra's willingness to pay was $95,and Kristen's willingness to pay was $80.Which of the following statements is correct?

• A)For the three individuals together,consumer surplus amounts to $35.
• B)Having bought the cell phone,Kristen is better off than she would have been had she not bought it.
• C)Had the price of the cell phone been $95 rather than $80,Katie and Kendra definitely would have been buyers and Kristen definitely would not have been a buyer.
• D)The fact that all three individuals paid $80 for the same type of cell phone indicates that each one placed the same value on that cell phone.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing to pay and the total amount they actually pay.

Bananas

A type of edible fruit produced by various large, herbaceous plants in the genus Musa.

Consumer Surplus

The contrast between how much consumers are ready to pay for a good or service versus what they actually spend.

Consumer Surplus

The gap between the intended investment consumers are willing to make in a product or service and their actual financial outlay.