Final answer:
The question deals with calculating the change in consumer surplus due to a change in price in the context of a market demand equation. Consumer surplus represents the benefit to consumers of paying a price lower than what they are willing to pay, shown graphically by the area above the price and below the demand curve. The calculation requires integration, which isn't completed here due to lack of data, but the change in price from $30 to $20 implies an increase in consumer surplus.
Step-by-step explanation:
The subject of this question is Economics, specifically related to the topic of consumer surplus in response to changes in market conditions. The grade level here is most likely College, as it deals with more advanced economic concepts that are usually covered in undergraduate economics courses.
Consumer surplus is the benefit that consumers receive when they pay a price for a good that is less than what they are willing to pay. It is represented graphically as the area above the market price and below the demand curve. In this scenario, the market demand for a good is given by the equation P = 40 - 0.5Q, and there has been a decrease in price from P0 = $30 to P1 = $20. To calculate the change in consumer surplus, we need to find the change in the area above the new and old prices and below the demand curve.
To do this, we can integrate the demand equation from the quantity corresponding to the original price (P0) to the quantity corresponding to the new price (P1). The increase in consumer surplus is then represented by the difference in area between these two integrals. Without actual supply curve data, we cannot compute the exact change in consumer surplus, but we understand that an increase in consumer surplus will occur due to the price decrease.