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What is the total consumer surplus now

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Reference no: EM132481974

Initial Question

There are 6 potential consumers of computer games. Consumer 1 is willing to pay $40 for a computer game, consumer 2 is willing to pay $35, consumer 3 is willing to pay $30, consumer 4 is willing pay $25, consumer 5 is willing to pay $20, and consumer 6 is willing to pay $15.

a. Suppose the market price is $29. What is the total consumer surplus?

b. The market price decreases to $19. What is the total consumer surplus now?

c. When the price fell from $29 to $19, how much did each consumer's individual consumer surplus change?

  1. When demand is estimated to be p = 50 - 0.5x, calculate the loss in consumer surplus when a tax drives price from $1 to $5.
  2. Suppose we're given the demand function p = -50q + 2000 and we had the supply function p = 10q + 500.

a. Calculate the price and quantity at equilibrium point.

b. Calculate the consumer surplus, producer surplus, and total surplus. 

Reference no: EM132481974

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