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Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup, and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. Jane's consumer surplus from the coffee she buys is ________ per day.

Respuesta :

Answer:

$1.70

Explanation:

Data provided in the question:

Amount Jane is willing to pay for the first cup of coffee = $4

Amount Jane is willing to pay for the second cup of coffee = $2.50

Amount Jane is willing to pay for the third cup of coffee = $1

Price of a cup of coffee = $2.40

Now,

The consumer surplus is given as:

Consumer surplus = Amount consumer willing to pay - Price of the product

Thus,

Consumer surplus = $4.00 - $2.40

or

Consumer surplus = $1.70

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