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Q:When senior citizens get discounted metrocards, their consumer surplus for a subway ride is higher than...

Q:When senior citizens get discounted metrocards, their consumer surplus for a subway ride is higher than that of non-senior citizens, who do not get the discount.

Is it true or False? If it is true why (in words)

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Answer #1

True,

Consumer surplus in the market is the difference between the actual amount of price paid for the goods and the expected price to be paid. For a metrocard a senior citizen might be expecting a higher price but a discount will allow them to pay less in the market and the difference will be the increased consumer surplus that the person who didn't got the discount will not get.

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