Juliana decided to go on a shopping trip and bought a pair o

Juliana decided to go on a shopping trip and bought a pair of jeans. The jeans had a price tag of? $129.95. When she took the jeans to the check? out, the jeans ended up being on sale? 20% off. The sales price was?$103.96, $25.99 less than the original price.

Juliana\'s consumer surplus from the purchase of the jeans is

A.

?$103.96 since this is the actual price she pays.

B.

exactly? $25.99 since this is the difference between the maximum price she is willing to pay for the jeans and the actual price she pays.

C.

at least? $25.99 since this is the difference between the price she is willing to pay and the actual price she? pays, but she could have be willing to pay more than? $129.95 for the jeans.

D.

?$129.95 since this is the price she is willing to pay.

Solution

Since, Juliana was able to buy Jeans at a lower price. Equilibrium price is $ 129.95 and a discount of 20% Thus effective price is $ 103.96.

Thus consumer surplus = $ 25.99