Jenn is willing to pay $75 for a purse and the purse's price is $60. What is Jenn's consumer surplus?
What will be an ideal response?
The consumer surplus equals the difference between the marginal benefit of the good and the price actually paid. Jenn is willing to pay $75 for the purse, so its marginal benefit to her is $75. However, she only must pay $60, so Jenn has a consumer surplus of $75 - $60 = $15.
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