Question

Joe's demand for spring water can be represented as p = 16 - 0.7Q (where p is measured in $/ gallon and Q is measured in gallons). He recently discovered a spring where water can be obtained free of charge. His consumer surplus from this water is?

Answer 1

The consumer surplus from the free spring water is $16 per gallon.

Step-by-step explanation:

The consumer surplus from the free spring water can be calculated by finding the difference between the maximum amount Joe is willing to pay and the price he actually pays for each gallon. In this case, Joe's demand for spring water can be represented as p = 16 - 0.7Q (where p is measured in $/ gallon and Q is measured in gallons). When the price is zero ($0), Joe is willing to pay a maximum of $16 per gallon. So, the consumer surplus is $16 - $0, which equals $16 per gallon.