Suppose that there are three identical vases available to be purchased. Buyer 1 is willing to pay $30 for one, buyer 2 is willing to pay $25 for one, and buyer 3 is willing to pay $20 for one. If the price is $25, how many vases will be sold and what is the value of the consumer surplus in this market

Two vases will be sold.

The value of consumer surplus is $5.

Explanation:

There are three identical vases available to be purchased.

Buyer 1 is willing to pay $30 for one, buyer 2 is willing to pay $25 for one, and buyer 3 is willing to pay $20 for one.

The price is $25.

Buyer 1 and buyer 2 will purchase the vase as they are willing to pay more than the price. Buyer 3 is not willing to pay the price.

So, only two vases will be sold.

The consumer surplus is the difference between the price a consumer is willing to pa and the price he actually pays.

The consumer surplus

= ($30-$25) + ($25-$25)

= $5 + $0

= $5