Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. Consider the market for electric vehicles. The market price of each electric vehicle is $320,000, and each consumer demands no more than oneelectric vehicle.Suppose that Lorenzo is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $560,000. Based onLorenzo's willingness to pay, the following graph shows his demand curve for electric vehicles.Shade the area representing Lorenzo's consumer surplus using the green rectangle (triangle symbols).PRICE (Thousands of dollars)6405604004003202401608000Lorenzo's Demand12QUANTITY (Electric vehicles)Market PriceLorenzo's Consumer Surplus(?)Now, suppose another buyer, Neha, enters the market for electric vehicles, and her willingness to pay is $480,000. Based on Neha's and Lorenzo's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circleSymbol). Next, shade Lorenzo's consumer surplus using the green rectangle (triangle symbols), and shade Neha's consumer surplus using the purplerectangle (diamond symbols).Note: Plot your points as a step function in the order in which you would like them connected. Line segments will connect the points automatically.PRICE (Thousands of dollars)64050040040032024010080O0QUANTITY (Electric vehicles)Market PriceSuppose Sam is willing to pay a total of $240,000 for an electric vehicle.Demand CurveLorenzo's Consumer SurplusNeha's Consumer SurplusTrue or False: Keeping his maximum willingness to pay for an electric vehicle in mind, Sam will buy the electric vehicle because it would be worthmore to him than its market price of $320,000.

Consumer surplus implies the benefit the consumer enjoys by buying a unit of good at a market price,…

der the market for electric vehicles. The market price of each electric vehicle is $320,000, and each consumer demands no more than one electric vehicle. Suppose that Lorenzo is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $560,000. Based on Lorenzo's willingness to pay, the following graph shows his demand curve for electric vehicles.

der the market for electric vehicles. The market price of each electric vehicle is $320,000, and each consumer demands no more than one electric vehicle. Suppose that Lorenzo is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $560,000. Based on Lorenzo's willingness to pay, the following graph shows his demand curve for electric vehicles.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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