Question

12. Suppose that the market demand for yo-yos is given by Q-6,000-200P. If the market price of yo-yos is $5 per unit, market consumer surplus is A. $125,000. B. $62,500. C. $25,000. D. None of the above. 13. Market consumer surplus is due to the fact that A. Different con sumers are willing to pay different prices for the same product. B. All consumers pay the same price for the product. C. The supply curve is upward sloping. D. All of the above. E. A and B. Sergey's demand for chai tea Quantity demanded Price $9 1 $7 $5 $3 $1 2 3 4 5 14. The price for chai tea is $3. What is Sergey's consumer surplus from his consumption of chai tea? A. $2. B. $4 C. $6 D. $12 15. Each point on the demand curve reflects A. The highest price sellers will accept for all units over time. B. The lowest-cost technology available to produce a good. C. All the wants of a given household. D. The highest price consumers are willing to pay for an additional unit of a good.

Answer 1

12) P = 5

Q = 6000-200*5 = 5000

Maximum reservation price = 6000/200 = 30

CS=0.5*5000*(30-5) = 62500

Option(B)

13) All of the given options are correct

option(D)

14) cs = (9-3)+(7-3)+(5-3)+(3-3) = 12

option(D)

15) Each point on the demand curve shows the highest price the consumers are willing to pay for an additional unit of a good

option(D)