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CHAPTER 4C CONSUMER SURPLUS

CHAPTER 4C CONSUMER SURPLUS - ECON 306 CLASS HANDOUT...

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For Personal Use Only. Not For Circulation. © Charles R. Hulten 2010 ECON 306 CLASS HANDOUT CONSUMER SURPLUS WILLINGNESS TO PAY CONSUMER SURPLUS MAXIMUM CONSUMER SURPLUS PRODUCER SURPLUS APPLICATION: TAXES AND ELASTICITIES APPLICATION: THE IPOD PROBLEM AGAIN
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For Personal Use Only. Not For Circulation. © Charles R. Hulten 2010 ALTERNATIVE DOLLAR METRIC OF UTILITY: WILLINGNESS TO PAY Price Quantity 6 6 5 0 1 5 4 3 2 4 3 2 1 a b c d e f Willingness-to-Pay unit 1 = a = 5.5 unit 2 = b = 4.5 unit 3 = c = 3.5 unit 4 = d = 2.5 unit 5 = e = 1.5 unit 6 = f = 0.5 Total = ? Price Quantity Demand Curve P = 6 - Q 6 6 5 0 1
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