The sky is dumping freezing rain, it's 11:30 at night, and you're standing on a street corner 15 miles from home. You open your Uber app and see that the trip is going to cost you roughly $50, as prices are surging 200 percent above normal. But you summon the car anyways. In fact, you might not have hesitated to go as high as $100, just to get dry in that comprising moment.

Required:

a. Uber uses a surge (dynamic) pricing model. Research and briefly explain what surge pricing is. (5 marks)

b. What is your willingness to pay for the ride? What would be the size of the consumer surplus?