Question

A person is willing to pay $50 per visit for physical therapy, but she pays $35 per visit. This person receives a consumer surplus of $85 per visit.

Answer 1

False

Answer 2

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Answer 3

[AI-generated answer — Explain Bot]

To understand how to calculate the consumer surplus, we first need to define what consumer surplus is. Consumer surplus is the difference between the maximum price a consumer is willing to pay for a product or service and the price that they actually pay.

In this case, the person is willing to pay $50 per visit for physical therapy, but they actually pay $35 per visit. Therefore, the consumer surplus can be calculated as the difference between these two amounts: $50 - $35 = $15.

However, the given information mentions that the person receives a consumer surplus of $85 per visit. This implies that there is an additional amount of consumer surplus beyond what can be explained by the difference between the maximum willingness to pay and the actual price. To determine the source of this additional consumer surplus, we need more information.

It is possible that the $85 includes some non-monetary benefits, such as convenience, quality of service, or other related factors. Without more specific details, we cannot determine the exact breakdown of this extra consumer surplus.

In summary, the consumer surplus for each visit is calculated as the difference between the maximum willingness to pay and the actual price. However, if there is an additional consumer surplus beyond this calculation, it may be influenced by non-monetary factors that need further clarification.