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ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The following graph shows the weekly market demand for cheesecake In a small economy. Use the purple polnt (diamond symbol) to shade the area representing consumer surplus when the price (P) of cheesecake is $3.00 per slice. Then, use the green polnt (triangle symbol) to shade the area representing additional consumer surplus when the price fals to $2.25 per slice. Small Economy's Wookly Damand 7.50 6.75 Iniial Consumar Surplus (P= $3.00) 6.00 5.25 Damand 4.50 Additional Cansumer Surplus (P= $2.25) 3.75 P= $3.00 3.00 2.25 P= 12.25 150 0.75 20 40 60 80 100 120 140 160 180 200 QUANTITY (Thousands of slices of choasacaka) PRICE (Dallars par slice)
Transcribed Image Text:The following graph shows the weekly market demand for cheesecake In a small economy. Use the purple polnt (diamond symbol) to shade the area representing consumer surplus when the price (P) of cheesecake is $3.00 per slice. Then, use the green polnt (triangle symbol) to shade the area representing additional consumer surplus when the price fals to $2.25 per slice. Small Economy's Wookly Damand 7.50 6.75 Iniial Consumar Surplus (P= $3.00) 6.00 5.25 Damand 4.50 Additional Cansumer Surplus (P= $2.25) 3.75 P= $3.00 3.00 2.25 P= 12.25 150 0.75 20 40 60 80 100 120 140 160 180 200 QUANTITY (Thousands of slices of choasacaka) PRICE (Dallars par slice)
1. Consumer surplus for an individual and a market The following graph shows Musashi's weekly demand for cheesecake, represented by the blue line. Polnt A represents a polnt along his weekly demand curve. The market price of cheesecake Is $3.00 per slice, as shown by the horizontal black line. Musashi's Wookly Damand 7.50 6.75 6.00 5.25 Damand 4.50 + 3.75 Prica 3.00 2.25 1.50 0.75 2 4 10 12 14 16 18 20 QUANTITY (Slicas of choasocaka) From the prevlous graph, you can tell that Musashi is willing to pay $ $3.00 per slice, the consumer surplus he galns from the sth slice of cheesecake is $ for his 8th slice of cheesecake each week. Because he has to pay only Suppose the price of cheesecake were to fall to $2.25 per slice. At this lower price, Musashi would recelve a consumer surplus of $ from the sth slice of cheesecake he buys. PRICE (Dallars par slice)
Transcribed Image Text:1. Consumer surplus for an individual and a market The following graph shows Musashi's weekly demand for cheesecake, represented by the blue line. Polnt A represents a polnt along his weekly demand curve. The market price of cheesecake Is $3.00 per slice, as shown by the horizontal black line. Musashi's Wookly Damand 7.50 6.75 6.00 5.25 Damand 4.50 + 3.75 Prica 3.00 2.25 1.50 0.75 2 4 10 12 14 16 18 20 QUANTITY (Slicas of choasocaka) From the prevlous graph, you can tell that Musashi is willing to pay $ $3.00 per slice, the consumer surplus he galns from the sth slice of cheesecake is $ for his 8th slice of cheesecake each week. Because he has to pay only Suppose the price of cheesecake were to fall to $2.25 per slice. At this lower price, Musashi would recelve a consumer surplus of $ from the sth slice of cheesecake he buys. PRICE (Dallars par slice)
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