Figure 318 reference ref 3 18 figure 318 using figure

This preview shows page 20 - 24 out of 33 pages.

Figure 3.18 Reference: Ref 3-18 (Figure 3.18) Using Figure 3.18, answer the following questions: a. For demand curve D 1 , what is the level of consumer surplus at a price of $ b. For demand curve D 2 , consumer surplus is $6,400 at a price of $40. What the demand choke price?
a. The area of the triangle between the demand curve and the market price is 0.5(60 ? 40)(30 ? 0) = $300. b. The area of the triangle between the demand curve and market price is $6, so set 0.5(base)(height) =$6,400. The height is 80 and the base equals the demand choke price ?40, so consumer surplus is 0.5(demand choke price ? 40)(80) = $6,400. Now, solve for the demand choke price. Demand choke price = $200. 12 6 Figure 3.19 Reference: Ref 3-19 (Figure 3.19 ) Refer to Figure 3.19 to answer the following questions: a. What is the level of consumer and producer surplus? b. If consumers are willing to buy 10 more units of the good at any price, wha happens to consumer and producer surplus? P ? .
12 7 Figure 3.20
Reference: Ref 3-20 (Figure 3.20) Refer to Figure 3.20 to answer the following questions: a. Which letter(s) represent(s) the area of consumer surplus before the price i b. Which letter(s) represent(s) the area of producer surplus before the price in c. Which letter(s) represent(s) the area of consumer surplus after the price inc d. Which letter(s) represent(s) the area of producer surplus after the price inc e. Which letter(s) represent(s) the area of the deadweight loss after the price i C D
12 8 Figure 3.21 Reference: Ref 3-21 (Figure 3.21) Refer to Figure 3.21 to answer the following questions: a. Which letter(s) represent(s) the area of consumer surplus before the price b. Which letter(s) represent(s) the area of producer surplus before the price d c. Which letter(s) represent(s) the area of consumer surplus after the price d
d. Which letter(s) represent(s) the area of producer surplus after the price decrease? e. Which letter(s) represent(s) the area of the deadweight loss after the price decrease? A B

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture