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 smartphones. The market price of a smartphone is shown by the black horizontal line at $150. Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Bob, green (triangle symbols) for Cha, purple (diamond symbols) for Eric, tan (dash symbols) for Ginny, and blue (cirde symbols) for Kenji Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a smartphone at a market price of $150 (Note: 1 a person will not purchase a smartphone at the market price, indicate this by leaving his or her rectangle in its original position on the palette.) 690 Bob 350 Cho Bob 300 Cho PRICE (Dolars per smartphone) 200 Eric 150 Market Price Eric 100 Ginny 56 Gry O

Answer 1

Answer : Given :: 150 Market price of smart phones and the demand curve us given in the digsam below Price 400 Bob 350 3001 Cho 250 + 200 Esic 150 market ponce 100 Ginny Kenji 50 O + 2 3 4 5 7 8 Quantity Now Consumer surplus is the area below demand and above market price Curve will be the consumer the red shaded area surplus for Bob. Id Blue shaded area is the consumer suoplus for cho & Black shaded area is the consumer susplus for Eric.

delaTotal consumed surplus will be combine area of consumer surplus of Bob, Cho, Eric Consumer Susplus Consumer Surplus of Bob + Consumer Surplus of cho + Consumer Surplus of Eric Consumer Susplus = 60 (200) + (1) (150) + (50) Consumer Surplus 400 If market price will increase to 250 then do demand curve it will be shown as Price 400 Bob 350 Cho 300 market price 250 Esic 200 1 150 Ginny 100 1 1 1 Kenji 50 4 1 1 O 2 3 4 5 Quantity As we know Consumer surplus is the area below demand curve & above price line.

i. Now at new market price of 250, Only Bob & Cho will have consumer svoplus so only Bob and cho will purchase at new market boice. Cooelo loot