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There are six potential consumers of computer games, each willing to buy only one game.

There are six potential consumers of computer games, each willing to buy only one game. Consumer 1 is willing to pay $40 for a computer game, consumer 2 is willing to pay $35, consumer 3 is willing to pay $30, consumer 4 is willing pay $25, consumer 5 is willing to pay $20, and consumer 6 is willing to pay $15.

a. Suppose the market price is $29. What is the total consumer surplus

b. Now the market price decreases to $19. What is the total consumer surplus now? (2 points)

c. When the price fell from $29 to $19, how much did each consumer’s individual consumer surplus change? (2 points)

6. On Thursday nights, a local restaurant has a pasta special. Ari likes the restaurant’s pasta, and his willingness to pay for each serving is shown in the accompanying table.

a. If the price of a serving of pasta is $4, how many servings will Ari buy? (1 point)

How much consumer surplus does he receive? (1 point)

b. The following week, Ari is back at the restaurant again, but now the price of a serving of pasta is $6. By how much does his consumer surplus decrease compared to the previous week? (1 point)

c. One week later, he goes to the restaurant again. He discovers that the restaurant is offering an “all you can eat” (in other words: until you are not willing to eat anymore) special for $25. How much pasta will Ari eat, and how much consumer surplus does he receive now? (2 points)

d. Suppose you own the restaurant and Ari is a “typical” customer. What is the highest price you can charge for the “all you can eat” special and still attract customers? (1 point)

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