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ECON MICRO

5th Edition
William A. McEachern
Publisher: Cengage Learning
ISBN: 9781337000536

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BuyFindarrow_forward

ECON MICRO

5th Edition
William A. McEachern
Publisher: Cengage Learning
ISBN: 9781337000536
Chapter 6, Problem 3.10P
Textbook Problem
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(Consumer Surplus) If, toward the end of the day, some people become indifferent whether or not they go on another ride, how can we say that they derived consumer surplus from their visit to the amusement park that day?

To determine

The way we can say that a rider has derived his consumer surplus from their visit to the amusement park if the consumer become indifferent between two rides.

Consumer surplus:

It is the difference between the willingness to pay and what he actually pays for the good. It is the area below the demand curve and above the price level.

ECON MICRO, Chapter 6, Problem 3.10P

Explanation of Solution

The admission fee in amusement parks behaves like a sunk cost. It is already paid so it makes no difference whether the consumer are willing to take a ride or not...

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