Now, suppose another buyer, Neha, enters the market for loft houses, 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 (circle symbol). Next, shade Lorenzo's consumer surplus using the green rectangle (triangle symbois), and shade Neha's consumer surplus using the purple rectangle (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) 640 8 560 480 400 320 240 160 80 QUANTITY (Loft houses) Suppose Sam is willing to pay a total of $240,000 for a loft house. True Market Price False Demand Curve Lorenzo's Consumer Surplus i Neha's Consumer Surplus True or False: Keeping his maximum willingness to pay for a loft house in mind, Sam will buy the loft house because it would be worth more to him than its market price of $320,000. image 2

Now, suppose another buyer, Neha, enters the market for loft houses, 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 (circle symbol). Next, shade Lorenzo's consumer surplus using the green rectangle (triangle symbois), and shade Neha's consumer surplus using the purple rectangle (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) 640 8 560 480 400 320 240 160 80 QUANTITY (Loft houses) Suppose Sam is willing to pay a total of $240,000 for a loft house. True Market Price False Demand Curve Lorenzo's Consumer Surplus i Neha's Consumer Surplus True or False: Keeping his maximum willingness to pay for a loft house in mind, Sam will buy the loft house because it would be worth more to him than its market price of $320,000. image 2

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 15PAE

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