Practice prompt · Q:economics-and-market-foundations/compute-consumer-surplus-001

Compute and qualify consumer surplus

Compute a linear buyer area and distinguish modeled willingness to pay benefit from cash, assets, universal access, and complete welfare.

Updated Aug 7, 2026 Review due Nov 7, 2026

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Linden's inverse demand intercept is $140, equilibrium price is $60, and 800 chairs trade in the baseline model. Which consumer-surplus result is correct?

Choose the best answer. a $32,000 per modeled week, computed as one-half times the $80 willingness-to-pay height times 800 traded chairs; it is not a seller asset, cash receipt, or proof of equal buyer access. b $48,000 because consumer surplus equals equilibrium price times quantity. c $32,000 of revenue recognized by Linden sellers.

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Answer: a

Choice a. Consumer surplus is 1/2 × ($140 - $60) × 800 = $32,000 per modeled week under the supplied demand and allocation assumptions.