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From the previous graph, you can tell that Yakov is willing to pay $ bowl, the consumer surplus he gains from the 6th acai bowl is S for his 6th acai bowl each week. Because he has to pay only $2.25 per Suppose the price of acai bowls were to fall to $1.50 per bowl. At this lower price, Yakov would receive a consumer surplus of $ 6th acai bowl he buys. The following graph plots the monthly market demand curve (blue line) for acai bowls in a hypothetical small economy. from the Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of acai bowls is $2.25 per bowl. Then, use the green point (triangle symbol) to shade the area representing additional consumer surplus when the price falls to $1.50 per bowl.

From the previous graph, you can tell that Yakov is willing to pay $ bowl, the consumer surplus he gains from the 6th acai bowl is S for his 6th acai bowl each week. Because he has to pay only $2.25 per Suppose the price of acai bowls were to fall to $1.50 per bowl. At this lower price, Yakov would receive a consumer surplus of $ 6th acai bowl he buys. The following graph plots the monthly market demand curve (blue line) for acai bowls in a hypothetical small economy. from the Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of acai bowls is $2.25 per bowl. Then, use the green point (triangle symbol) to shade the area representing additional consumer surplus when the price falls to $1.50 per bowl.

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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**Educational Content on Consumer Surplus and Market Demand** **Graph Analysis:** - The initial graph depicts a linear demand curve with "Quantity (acai bowls)" on the x-axis, ranging from 0 to 20, and "Price ($)" on the y-axis, ranging from 0 to 1.50. **Text Explanation:** 1. **Consumer Willingness to Pay:** - Yakov is willing to pay a certain amount for his 6th acai bowl each week. - When Yakov pays $2.25 per bowl, the consumer surplus from the 6th bowl is calculated based on Yakov's willingness to pay versus the actual price. 2. **Price Change and Consumer Surplus:** - If the price of acai bowls decreases to $1.50, Yakov's consumer surplus for the 6th bowl would increase, reflecting the benefit of the lower price. 3. **Market Demand Curve:** - The subsequent graph illustrates a hypothetical small economy's monthly market demand for acai bowls with a blue line representing the demand curve. **Instructions for Graph Interaction:** - Utilize the purple point (diamond symbol) to highlight the area representing consumer surplus when the price is $2.25 per bowl. - Employ the green point (triangle symbol) to denote the additional consumer surplus area as the price drops to $1.50 per bowl. **Graph Interpretation:** - **"Small Economy’s Monthly Demand" Graph:** - The x-axis represents quantity (0-20), while the y-axis shows price ($0-7.50). - Initial consumer surplus (at $2.25) is marked for visual understanding, and there's an option to show changes as price adjustments occur. This educational material helps learners visualize economic concepts like consumer surplus and demand shifts, enhancing comprehension of market dynamics and consumer behaviors.
Transcribed Image Text:**Educational Content on Consumer Surplus and Market Demand** **Graph Analysis:** - The initial graph depicts a linear demand curve with "Quantity (acai bowls)" on the x-axis, ranging from 0 to 20, and "Price ($)" on the y-axis, ranging from 0 to 1.50. **Text Explanation:** 1. **Consumer Willingness to Pay:** - Yakov is willing to pay a certain amount for his 6th acai bowl each week. - When Yakov pays $2.25 per bowl, the consumer surplus from the 6th bowl is calculated based on Yakov's willingness to pay versus the actual price. 2. **Price Change and Consumer Surplus:** - If the price of acai bowls decreases to $1.50, Yakov's consumer surplus for the 6th bowl would increase, reflecting the benefit of the lower price. 3. **Market Demand Curve:** - The subsequent graph illustrates a hypothetical small economy's monthly market demand for acai bowls with a blue line representing the demand curve. **Instructions for Graph Interaction:** - Utilize the purple point (diamond symbol) to highlight the area representing consumer surplus when the price is $2.25 per bowl. - Employ the green point (triangle symbol) to denote the additional consumer surplus area as the price drops to $1.50 per bowl. **Graph Interpretation:** - **"Small Economy’s Monthly Demand" Graph:** - The x-axis represents quantity (0-20), while the y-axis shows price ($0-7.50). - Initial consumer surplus (at $2.25) is marked for visual understanding, and there's an option to show changes as price adjustments occur. This educational material helps learners visualize economic concepts like consumer surplus and demand shifts, enhancing comprehension of market dynamics and consumer behaviors.
**Consumer Surplus for an Individual and a Market** The graph illustrates Yakov's monthly demand curve (blue line) for acai bowls. The point marked "A" represents a specific point along this demand curve. The market price of acai bowls is $2.25 per bowl, shown by the horizontal black line. **Graph Explanation:** - **X-Axis (Horizontal):** Represents the quantity of acai bowls, ranging from 0 to 20 bowls. - **Y-Axis (Vertical):** Represents the price per bowl in dollars, ranging from $0 to $7.50. - **Demand Curve (Blue Line):** Shows the relationship between the quantity of acai bowls Yakov is willing to buy and the price per bowl. - **Point "A":** Indicates a spot on the demand curve where Yakov's desired quantity and price intersect. - **Black Horizontal Line:** Represents the market price of $2.25 per bowl. The graph helps visualize consumer surplus, highlighting the difference between what a consumer is willing to pay and the actual market price.
Transcribed Image Text:**Consumer Surplus for an Individual and a Market** The graph illustrates Yakov's monthly demand curve (blue line) for acai bowls. The point marked "A" represents a specific point along this demand curve. The market price of acai bowls is $2.25 per bowl, shown by the horizontal black line. **Graph Explanation:** - **X-Axis (Horizontal):** Represents the quantity of acai bowls, ranging from 0 to 20 bowls. - **Y-Axis (Vertical):** Represents the price per bowl in dollars, ranging from $0 to $7.50. - **Demand Curve (Blue Line):** Shows the relationship between the quantity of acai bowls Yakov is willing to buy and the price per bowl. - **Point "A":** Indicates a spot on the demand curve where Yakov's desired quantity and price intersect. - **Black Horizontal Line:** Represents the market price of $2.25 per bowl. The graph helps visualize consumer surplus, highlighting the difference between what a consumer is willing to pay and the actual market price.
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