Answered: The following graph plots the demand…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

(ALL CREDIT GOES TO CENGAGE)

The following graph plots the demand curve (blue line) for several consumers in the market for bluetooth speakers in Meadville, a small town located in Pennsylvania. The Meadville market price of a bluetooth speaker is given by the horizontal black line at $180.

Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Nick, green (triangle symbols) for Rosa, purple (diamond symbols) for Tim, tan (dash symbols) for Alyssa, and blue (circle symbols) for Brian. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a bluetooth speaker at a market price of $180. (Note: If a person will not purchase a bluetooth speaker at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)

(images below)

Based on the information on the previous graph, you can tell that _________ will buy bluetooth speakers at the given market price, and total consumer surplus in this market will be $________.

Suppose the market price of a bluetooth speaker increases to $300.

On the following graph, use the rectangles once again to shade the areas representing consumer surplus for each person who is willing and able to purchase a bluetooth speaker at the new market price: orange (square symbols) for Nick, green (triangle symbols) for Rosa, purple (diamond symbols) for Tim, tan (dash symbols) for Alyssa, and blue (circle symbols) for Brian. (Note: If a person will not purchase a bluetooth speaker at the new market price, indicate this by leaving his or her rectangle in its original position on the palette.)

(image below)

Based on the information in the second graph, when the market price of a bluetooth speaker increases to $300, the number of consumers willing to buy a bluetooth speaker ________ to _________ , and total consumer surplus ______ to $_______.

PRICE (Dollars per bluetooth speaker)
480
420
360
300
240
180
120
60
0
0
1
Nick
Rosa
Tim
2 3
Alyssa
5
Brian
4
QUANTITY (Bluetooth speakers)
Market Price
6
7
8
ם-ם
Nick
Rosa
Tim
Alyssa
Brian
?

PRICE (Dollars per bluetooth speaker)
480
420
360
300
240
180
120
60
0
0
1
Nick
Rosa
2
3
Tim
Alyssa
5
4
6
QUANTITY (Bluetooth speakers)
Brian
Market Price
7
8
Nick
Rosa
Tim
Alyssa
Brian
?

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