Unformatted text preview: is where the demand curve intersects
the horizontal axis. When S equals zero, PS equals 525/50 = 10.5. This is where the demand curve intersects
the vertical axis.
Consumer surplus is the netbenefit a consumer receives from participating in the market for a good.
Graphically, it is equal to the area under the demand curve and above the price. When the price is $4.00, the
quantity demanded equals: S = 525 – 50(4.00) S = 525 – 200.00 S = 325.00.
Consumer surplus (CS) initially equals the area of...
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This note was uploaded on 01/22/2014 for the course ECO 3352 taught by Professor Ax during the Fall '13 term at Troy.
- Fall '13