Question

Answer the following questions based on the tables below.

Buyer Willingness to Pay for One Unit
A $35
B 33
C 27
D 22
E 21
F 13
G 13
H 12
I 6

Seller Willingness to Sell One Unit
A $4
B 9
C 12
D 14
E 15
F 21
G 23
H 30
I 51

a. The quantity demanded at a price of $10 is: _______________.
b. The quantity demanded at a price of $25 is: ___________

Answer 1

8

3

Step-by-step explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

Consumer surplus = willingness to pay – price of the good

A consumer would demand for a product as long as he can earn a positive consumer surplus

When price is 10, there is a consumer surplus for buyers A to H. buyer I, would earn a negative consumer surplus if he purchases the product. Thus, the quantity demand at that price would be 8

When price is $25, there is a consumer surplus for buyers A to C. From buyer D, buyers would have a negative consumer surplus so they would not purchase the product