Question

Eco 302 Intermediate Microeconomics Homework #4 (30 points) 1. [6 points) Laptoplane is a company which offers internet access at airports to customers who are travelling. The company estimated the average consumer's demand for internet access and it is given in the figure below. a) Calculate the total value an average consumer places on 10 minutes of total internet accesss? b) Suppose Laptoplane charges $0.60 per minute for internet access. Calculate the consumer surplus. / Price ($/mins) 10 12 Quantity (mins) 14 16 18

Answer 1

# Equation of average consumen demand for interesti P-PI = P₂ =P Q-QI Q2-Q1 =) P-220-2 - Q-O 20-0 P1 = 2, 2,70 P2=0, Q2 = 20 012)1., Qu) > 10 P-20 = -Q (20,0) Q 7110P+Q = 20) 51 P= 20-4 Equation of AO " 10 Total Value an aлaрa Counал at Q= 10 min » p =20-Q P = 20-10 10 al=0 Total value an average consumes places on 10 minutes be & © At p=4060 C.S=Constell quantity demanded be tQ=20 Q=14 Consunun surplus = Area of a triangle ABC AB cos is surplus =$9.8 # HH 0.64 [cs = $908) = /2 x Base xheight 2 = 1X ABXAL = 1 (2-06) (14) = 908