Question

6. The table below shows the willingness to pay (WTP) for 9 customers for one jar of honey from a rare bee from Shaolin. WTP ($) Customer Robert Gary Russell Clifford Corey Dennis Jason Elgin Lamont What is the total consumer surplus when the equilibrium price per jar of honey is $36. (2 points)

Answer 1

6) WTP( willingness to pay) is the maximum price is willing to pay for that quantity. Above that price, CONSUMER won't buy the good. Lower that price ,will generate surplus to consumer .

CONSUMER surplus=WTP-p=WTP-36

If price is 36 then only robert ,gary, Russell and Clifford will buy the good as these are the only people whose WTP is higher or equal to price market price.

Robert CONSUMER surplus=WTP-36=55-36=19

Gary CS=50-36=14

Russell CS=45-36=9

Clifford CS=40-36=4

Total consumer surplus=19+14+9+4=46