Final answer:
Consumer Surplus is calculated using the linear demand equation P(Q) = 116.3 - 3.7Q and the market price of $31.1/unit. It is represented by the triangular area under the demand curve above the market price, and it is computed as half the product of the base and height of this triangle, rounded to the nearest dollar.
Step-by-step explanation:
To calculate the Consumer Surplus when the market price is $31.1/unit, we first need to find the quantity demanded at that price using the linear demand equation P(Q) = 116.3 - 3.7Q. Setting P(Q) to $31.1 and solving for Q gives us the quantity demanded at that price. The area of the consumer surplus is a triangular area under the demand curve and above the market price line. The base of the triangle is the difference between the quantity demanded at the market price and the quantity demanded when the price is zero (which would be the intercept of the demand curve on the quantity axis). The height is the difference between the maximum price consumers are willing to pay (which occurs when the quantity is zero) and the market price. The consumer surplus is then half of the base times the height.
To find the intercept on the quantity axis, we set the price to zero in the demand equation and solve for Q, giving us the maximum quantity. To calculate the consumer surplus, we apply the formula for the area of a triangle: (1/2) x base x height, where the base is the maximum quantity and the height is the maximum price minus the market price. After calculating the area, we round to the nearest dollar to get the final consumer surplus.