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26 August, 05:22

Austin and Erin are willing to pay $10 and $9, respectively, for a ticket to a screening of a new movie. What is the total consumer surplus for both Austin and Erin if the market price of a ticket is $6?

A) $4

B) $7

C) $9

D) $19

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Answers (1)
  1. 26 August, 05:35
    0
    B) $7

    Explanation:

    The computation of the consumer surplus is shown below:

    Consumer surplus = Willing to pay - Market price

    For Austin, The consumer surplus = $10 - $6 = $4

    For Erin, The consumer surplus = $9 - $6 = $3

    So, the total consumer surplus = $4 + $3 = $7

    Simply we deduct the market price from the willing to pay so that the consumer surplus can be computed
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