Question

3. Consumer surplus for a group of consumers The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for laptops. The market price of a laptop is shown by the black horizontal line at $90 Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Alex, green (triangle symbols) for Becky, purple (diamond symbols) for Clancy, tan (dash symbols) for Eileen, and blue (circle symbols) for Hubert. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a laptop at a market price of $90 (Note: If a person will not purchase a laptop at the market price, indicate this by leaving his or her rectangle in its original position on the palette.) 240 Alex 210 Alex 180 150 Becky Clancy 2120 Market Price Clancy Eileen 60 Hubert Eileen 30 Hubert QUANTITY (Laptops) Based on the information on the previous graph, you can tell that consumer surplus in this market will be S ▼ will buy laptops at the given market price, and total

Answer 1

Based on the information on the previous graph, you can tell that 3 buyers will buy laptops at the given market price, and total consumer surplus = (210 - 90) + (180 - 90) + (120 - 90) = $ 240

Price Alex Becky Clancy Market price 90 Eileen Hubert Quantity

New market price = $ 150

Based on the information in the second graph, when the market price of a laptop increases to $ 150, the number of consumers willing to buy a laptop decreases to 2 buyers, and total consumer surplus decreases to $ 90 (= (210 - 150) + (180 - 150))

Price Alex Becky 150 Market price Clancy Eileen Hubert Quantity