The current price for a good is $20, and 90 units are demanded at that price....
The current price for a good is $20, and 90 units are demanded at that price. The price elasticity of demand for the good is negative -1.5.
When the price of the good drops by 10 percent to $18,consumer surplus (increase or decrease) by $......... .(Enter your response to the nearest penny.)
Homework Answers
Current price= $ 20
When prices drop at 10% then new price= $ 18
Consumer surplus per unit= $20-$18 = $ 2
Consumer surplus amount= $ 2 × 90=
$ 180
Hence consumer surplus is increase by $ 180
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The current price for a good is $20, and 90 units are demanded
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