Question

m Price (s) Quantity an - - Price ($) At a price of $2, the consumer surplus is $8. Demand Suppose another buyer shows up who is willing to pay any amount for one unit. (Consider her word at face value.) 06 Using the multipoint curve drawing tool, draw the new demand curve. Properly label your line. Quantity

Answer 1

Since Consumer surplus is area below demand curve and above price.

Hence it can be said that the area found above the market price and below the demand curve is best known as consumer surplus.

When price is $2 and quantity is 2 units.

Consumer surplus= area of triangle 1 + area of triangle 2

=L*B+ L1*B1

=1*(7-5)+2(5-2)

=1*2+2*3

=2+6

=$8

Demand curve Prefectly Inclastic ) Price Quality vertical demand curve shows that For purchasing units of output, buyers. is willing to any amsound of money. This demand curve is known as Perfectly Inelastic