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Scenario 12-1 Ken places a $20 value on a cigar, and Mark places a $17 value on it. The equilibrium price for this brand of cigar is $15. Refer to Scenario 12-1. How much total consumer surplus do Ken and Mark get when each purchases one cigar

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Total Consumer Surplus is $7 whereas the consumer surplus of Ken is $5 and the consumer surplus of Mark is $2 respectively.

What is Consumer Surplus?

According to Alfred Marshall, Consumer Surplus is the gap between what is consumer ready to pay and what he pays this is called a Consumer Surplus. Consumer Surplus is always a positive that why we say it is surplus.

Equilibrium Price of Cigar =$15

Ken Place a Value on Cigar =$20

whereas, Mark Place a Value on Cigar =$17

It is required to Calculate the Total Consumer Surplus.

Total Consumer Surplus= What Consumer is ready to pay-what he pays.

For Ken Consumer Surplus is =$20-$15=$5 (A)

For Mark, Consumer Surplus Is =$20-$17=$2 (B)

Total Consumer Surplus is (A+B) = $7

Hence, the Total Consumer Surplus is $7 whereas the consumer surplus of Ken is $5 and the consumer surplus of Mark is $2 respectively.

Learn more about Consumer Surplus here:

https://brainly.com/question/15416023

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