Nick can purchase each milkshake for $2. For the first milkshake purchased Nick is willing to pay $4, for the second milkshake $3, for the third milkshake $2 and for the fourth milkshake $1. What is the value of Nick's consumer surplus for the milkshakes he buys?

Answer:The value of Nick's consumer surplus for the milkshakes he buys is $3.Step-by-step explanation:Given : Nick can purchase each milkshake for $2. For the first milkshake purchased Nick is willing to pay $4, for the second milkshake $3, for the third milkshake $2 and for the fourth milkshake $1.To find : What is the value of Nick's consumer surplus for the milkshakes he buys?Solution : Nick can purchase each milkshake for $2. For 1st milkshake purchased Nick is willing to pay $4Consume surplus $4-$2=$2For 2nd milkshake purchased Nick is willing to pay $3Consume surplus $3-$2=$1For 3rd milkshake purchased Nick is willing to pay $2Consume surplus $2-$2=$0For 4th milkshake purchased Nick is willing to pay $1Consume surplus $1-$2=$-1 cannot be consider.We add together the surplus from the 1st, 2nd, 3rd, and 4th milkshakei.e. $2+$1+$0=$3 Therefore, the value of Nick's consumer surplus for the milkshakes he buys is $3.