Answered: Consumer surplus for a group of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. Consumer surplus for a group of consumers

The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for smartphones. The market price of a smartphone is shown by the black horizontal line at $120.

Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Kevin, green (triangle symbols) for Maria, purple (diamond symbols) for Rajiv, tan (dash symbols) for Simone, and blue (circle symbols) for Yakov. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a smartphone at a market price of $120. (Note: If a person will not purchase a smartphone at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)

Each rectangie you can place on the following graph corresponds to a particular buyer in this market: arange (square symbols) for Kevin, green
(triangle symbols) for Maria, purpie (dlamand symbols) for Rajv, tan (dash symbals) for Simone, and blue (crcie symbols) for Yakov. Use the
rectangles to shade the areas representing consumer surplus for each person who is wiWing and abie to purchase a smartphane at a market price of
$120. (Note: If a persan will not purchase a smartphone at the market price, indicate this by leaving his or her rectangle in its ariginal pasitian on the
palette.)
240
Kevin
210
Maria
Kevin
180
Rajiv
190
Maria
Market Price
120
Simone
Rajv
Yakov
Simone
30
1
2
4
Yakov
QUANTITY (Smarphones)
Based on the information on the previous graph, you can tell that
will buy smartphones at the given market price, and total
consumer surplus in this market will be
Suppose the market price of a smartphone decreases to $60.
On the following graph, use the rectangies ance again to shade the areas representing consumer surplus for each persan who is willing and able to
purchase a smartphone at the new mavket price: orange (square symbais) for Kevin, green (triangie symbols) for Maria, purpie (diamand symbols) for
Rajiv, tan (dash symbals) for Simone, and blue (circie symbols) for Yakov. (Note: If a person wi not purchase a smartphone at the new market
price, indicate this by leaving his or her rectangle in its original position an the palette.)
240
Kevin
210
Maria
Kevin
Rajiv
150
Maria
120
Simone
Rajv
Market Price
Yakov
Simone
30
D
Yakov
QUANTITY (Smarphones)
Based on the information in the second graph, when the market price of a smartphone decreases to $60, the number of consumers willing to buy a
smartphone
v to
, and total consumer surplus
to
PRICE (Dolars per smartphone)
PRICE (Dollars per smartphone)

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