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3 December, 22:20

A cup of Starbucks Macchiato will cost you around $5, and a similar cup at McDonald is about $2.90. The exotic Indonesian Civet Coffee will cost around $20 per cup.

What is the most that you are willing to pay for a cup? Is it worth to pay more? Do you have any consumer surplus on this consumption?

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  1. 3 December, 22:56
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    For me, my demand for coffee is functional rather than "ecstatic". That is, I drink coffee just to get caffeinated.

    So, I'd rather do a McDonald any day than do the Indonesian Civet Coffee. Of course, sometimes you want to meet with a high profile client, and the best place would be Starbucks due to it's very welcoming and conducive ambience.

    So knowing that I'd make much more from a business deal when it pulls through, I wouldn't hestitate to have a meeting over a Starbucks or an Indonesian Vivet Coffee.

    Consumer Surplus is the measure between the price of a commodity and what consumers are willing to pay.

    If the choice was left to me, there wouldn't be any consumer surplus. But if I had to pay for an exotic Indonesian Civet Coffee when I didn't want to, then there'd be a huge Consumer Surplus.

    Cheers!
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