Question

The numbers in Table 7-1 reveal the maximum willingness to pay for a ticket to a Chicago Cubs vs. St. Louis Cardinal’s baseball game at Wrigley Field.

Buyer	Willingness to Pay
Jennifer	$10
Bryce	$15
Dan	$20
David	$25
Ken	$50
Lisa	$60

Refer to Table 7-4. If tickets sell for $40 each, then what is the total consumer surplus in the market?

a. $90.

b. $30.

c. $70.

d. $110.

Answer 1

As we can see, from the table, only those buyers are able to buy the tickets whose willingness to pay is greater than the market price which is $40. So, we can say that only Ken and Lisa are able to purchase the tickets as their willingness to pay is greater than the market price. Also, consumer surplus is the difference between the maximum willingness to pay and the actual price paid by the buyer, therefore, in this case, consumer surplus is $30 ((50-40)+(60-40)), so the right answer is option B.