Question

Alvaro De La Mora Valle purchases a Borussia Dortmund special jersey for $200, and his consumer surplus is $50. How much is Alvaro willing to pay for the Jersey?

Answer 1

Alvaro's consumer surplus represents the difference between the price he paid ($200) and the maximum price he was willing to pay for the jersey. Therefore, his maximum willingness to pay is determined by adding the consumer surplus ($50) to the price he paid.

Maximum willingness to pay = Price paid + Consumer surplus
Maximum willingness to pay = $200 + $50
Maximum willingness to pay = $250

Therefore, Alvaro is willing to pay $250 for the Borussia Dortmund special jersey.