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Consumer surplus in market segment

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Suppose the market for rental cars has two segments, business travelers and vacation travelers. The demand curve for rental cars by business travelers is Qb = 35 - 0.25P, where Qb is the quantity demanded by business travelers (in thousands of cars) when the rental price is P dollars per day. No business customers will rent cars if the price exceeds $140 per day. The demand curve for rental cars by vacation travelers is Qv = 120 - 1.5P, where Qv is the quantity demanded by vacation travelers (in thousands of cars) when the rental price is P dollars per day. No vacation customers will rent cars if the price exceeds $80 per day.

A) Derive and draw the market demand curve for rental cars.

B) If the price of a rental car is $60, what is the consumer surplus in each market segment?

Reference no: EM132559852

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