How To Buy Surplus Merchandise?

Consumer surplus/willingness to buy question. Please explain why (thank you)?

• For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Alex, Barb, and Carlos are the only three buyers of oranges, and only three oranges can be supplied per day. Alex $2.00First Orange $1.50Second Orange $0.75Third Orange Barb $1.50First Orange $1.00Second Orange $0.80Third Orange Carlos $0.75First Orange $0.25Second Orange $0Third Orange If the market price of an orange is $0.40, which answer is correct? 6 oranges are demanded per day and total consumer surplus amounts to $4.45. 6 oranges are demanded per day and total consumer surplus amounts to $5.10. 7 oranges are demanded per day and total consumer surplus amounts to $5.35. 7 oranges are demanded per day and total consumer surplus amounts to $5.50.

• Answer:

  Answer D: 7 oranges are demanded per day and total consumer surplus amounts to $5.50. Consumer surplus = Willingness to pay - Actual price. Add all willingness to pay for all amount more than 0.4 which is your price and subtract 7 times price from it. This will give you the consumer surplus. This should be the answer although I couldn't understand the "only 3 oranges are available part"