Question

Roy is willing to pay $2.50 for a sports drink. He puts $5.00 into the vending machine and pushes the button for the sports drink without noticing that the price has increased to $2.75 until he counts the change he gets back.roy has a_______________.

Answer 1

Roy is willing to pay $2.50 for a sports drink.He puts $5 into vending machine and pushes the button for the sports drink without noticing that the price has increased to $2.75 until he counts the change he gets back. Roy has a consumer surplus of $.25

Answer: Consumer surplus

Explanation:

Consumer surplus is a difference between the price that consumer pays and the price that he is willing to pay.Consumer surplus is a measure of economic welfare enjoyed by consumer. If consumer surplus is increasing ,it represents positive sign.

On a supply and a demand curve ,consumer surplus is represented by an area between equilibrium price and the demand curve.consumer surplus is important specially for small businesses because actually consumer surplus is a benefit which consumer derives from buying a product.This benefit will push them to buy the products again and again.