What is the total consumer surplus at equilibrium point

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Reference no: EM13182480

Now the following demand function for good 1 : q1= 20-2p1+4Y

(a) Initially the equilibrium price is $=2 and income is $10. What is the total consumer surplus at equilibrium point? What if the demand function is q1=p1^-2Y

(b) If the government imposes consumption tax on the good that raised prices by $1, by how much will the consumer's surplus change?

(d) If you your income is $ 1million,you spend $100 on good 1, and income elasticity was 0.02, does it matter whether you use EV, CV, or consumer surplus to measure the change in consumer welfare in (b).

Reference no: EM13182480

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