According to the graph shown, if the price decreases from $22 to $16, consumer surplus would...

Question

Question

Answer 1

Answer #1

Consumer surplus when price is 22

CS = 1/2(28 - 22)(40)

= 120

Consumer surplus when price is 16

CS = 1/2(28 -16)(80)

= 480

Change in consumer surplus = 480 - 120

= 360

Thus consumer surplus increases by 360

The increase in consumer surplus can also be directly computed as

Incease in CS = (22 -16)(40)+ 1/2(22-16)(80 -40)

= 240 + 120

= 360

So b is correct option

Answer 2

Similar Homework Help Questions

Borrower's surplus in the market for loanable funds is what? Hint: This is analogous to asking...

Borrower's surplus in the market for loanable funds is what? Hint: This is analogous to asking what is the consumer or producer's surplus...which one is it though? a. None of these b. 200 c. 400 d. 800 e. 1600 170 160 150 140 130 120 + 110 100 90 + Supply 80 + 70 60+ SO 40 Demand 30 20 10 2 4 8 10 12 14 16 18 20 22 24 26 28 30 Quantity of Loanable Funds
Please give the formula for these two questions 1 Price Supply Demand 1 2 3 4...

Please give the formula for these two questions 1 Price Supply Demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Quantity At the equilibrium price, total surplus is 11. + Refer to Figure 7-15. a. $150. b. $200. c. $250. d. $300. Figure 7-18 1 Price Supply Demand 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150...
* Question Completion Status: 1 Price 110 + 8 Supply 8 8 +- 8 Demand 8...

* Question Completion Status: 1 Price 110 + 8 Supply 8 8 +- 8 Demand 8 40+ S89 + + - 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 Quantity Refer to Figure 7-22. At the equilibrium price, total surplus is a. $3,500 b. $7,000. c. $2,500. d. $1,000 Supply HT + + + + + + + + + Demand + + + + 2 + 3 + 4 +...

The demand and supply schedules for a certain good are like follows: Demand Schedule &n

The demand and supply schedules for a certain good are like follows: Demand Schedule Supply Schedule Price $ Quantity Price $ Quantity 24 150 24 50 26 140 26 60 28 120 28 70 30 110 30 80 32 90 32 90 34 80 34 110 36 70 36 120 38 60 38 140 40 50 40 150 Graph and label Demand and Supply. Find the equilibrium price and quantity from the graph. What will happen if the price is...
The figure illustrates the market for coffee in Guatemala Price 150 140 130 120 110 100...

The figure illustrates the market for coffee in Guatemala Price 150 140 130 120 110 100 90 80 70 Domestic supply World pnce Domestic demand 50 30 20 10 2 468 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 Quanity Refer to Figure 9-1. With trade, Guatemala will export 22 units of coffee. export 10 units of coffee. import 30 units of coffee. import 12 units...
4) Welfare Analysis: Price Ceiling (10 points) Price ($) Supply Demand 0 10 20 30 40...

4) Welfare Analysis: Price Ceiling (10 points) Price ($) Supply Demand 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 Quantity Now imagine a price ceiling of $30. f. What effect does this have on Consumer and Producer Surplus? Start by clearly labeling the new CS and PS on the graph. g. What are the new dollar values for producer, consumer, and total surplus? h. Is there a Deadweight Loss? Find its value by...

3. Consumer surplus and price changes Aa Aa . The following graph shows the demand curve...

3. Consumer surplus and price changes Aa Aa . The following graph shows the demand curve for a group of consumers in the market for a mobile phone. Each consumer wants only one mobile phone. Assume that if an individual has a willingness to pay just equal to the market price, he or she will make the purchase. (Notice that on this graph, the demand curve is drawn as a series o steps, but only the rightmost corner of each...
1. Find the equilibrium, price and quantity, Label consumer surplus, and producer surplus in the graph....

1. Find the equilibrium, price and quantity, Label consumer surplus, and producer surplus in the graph. Calculate the area of consumer surplus, and producer surplus. $60 20 40 600
Demand Q2 Q Quantity According to the graph shown, at the price of P2, consumer surplus...

Demand Q2 Q Quantity According to the graph shown, at the price of P2, consumer surplus is OB O A+B+C+D+E Oc OA

Search this COU The following diagram shows the domestic demand and domestic supply in a market....

Search this COU The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. Price 190 O 180 170 Domestic Supply 160 150 140 130 120 110 100 90 80 70 60 50 o 40 30 20 Domestic Demand 10 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 Refer to Figure 9-22. With free trade, consumer surplus is a. $48,000...