2. Individual demand and consumer surplus Consider the market for hyperbaric chambers. The market price of each hyperbaric chamber is $320,000, and each consumer demands no more than one hyperbaric chamber. Suppose that Bob is the only consumer in the hyperbaric chamber market. Their willingness to pay for a hyperbaric chamber is $560,000. Based on Bob's willingness to pay, the following graph shows his demand curve for hyperbaric chambers. Shade the area representing Bob's consumer surplus using the green rectangle (triangle symbols). PRICE (Thousands of dollars) 640 560 480 400 320 240 160 80 0 0 Bob's Demand 1 2 4 3 Market Price QUANTITY (Hyperbaric chambers) 4 5 Bob's Consumer Surplus (?) Now, suppose another buyer, Cho, enters the market for hyperbaric chambers, and her willingness to pay is $480,000. Based on Cho's and Bob's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol). Next, shade Bob's consumer surplus using the green rectangle (triangle symbols), and shade Cho's consumer surplus using the purple rectangle (diamond cumbole)

2. Individual demand and consumer surplus Consider the market for hyperbaric chambers. The market price of each hyperbaric chamber is $320,000, and each consumer demands no more than one hyperbaric chamber. Suppose that Bob is the only consumer in the hyperbaric chamber market. Their willingness to pay for a hyperbaric chamber is $560,000. Based on Bob's willingness to pay, the following graph shows his demand curve for hyperbaric chambers. Shade the area representing Bob's consumer surplus using the green rectangle (triangle symbols). PRICE (Thousands of dollars) 640 560 480 400 320 240 160 80 0 0 Bob's Demand 1 2 4 3 Market Price QUANTITY (Hyperbaric chambers) 4 5 Bob's Consumer Surplus (?) Now, suppose another buyer, Cho, enters the market for hyperbaric chambers, and her willingness to pay is $480,000. Based on Cho's and Bob's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol). Next, shade Bob's consumer surplus using the green rectangle (triangle symbols), and shade Cho's consumer surplus using the purple rectangle (diamond cumbole)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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