In Figure 5-1 from the text, if the price of pizzas is $8:
a.
how many pizzas will the consumer purchase?
b.
what is the payment for the optimal number of pizzas?
c.
how much consumer’s surplus will the consumer receive?
What will be an ideal response?
| a. | The consumer will purchase 5 pizzas at a price of $8. |
| b. | The payment for 8 pizzas will be $40 ($8 per pizza multiplied by 5 pizzas). |
| c. | The consumer’s surplus will be $20 (actual payment of $40 subtracted from total utility of $60), which can be seen from the text, Table 5-1. |
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