Question

Suppose the price is $6 per sheet of plywood. Suppose the price falls to $4 per sheet of plywood.How much of the increase in consumer surplus was additional consumer surplus for the people who would have bought plywood at $6 anyway.

Answer 1

"$2,500" is the appropriate answer.

Step-by-step explanation:

The question given seems to be incomplete. Below there is a attachment of full question is provided.

The given values are:

Plywood's price,

= $6 per sheet

Price falls,

= $4

Now,

At price $6, the consumer surplus will be:

=
`0.5* 1000* (10-6)`

=
`0.5* 1000* 4`

=
`2,000` ($)

When price falls, the consumer surplus will be:

=
`0.5* 1500* (10-4)`

=
`0.5* 1500* 6`

=
`4,500` ($)

Hence,

The increase in consumer surplus will be:

=
`4500-2000`

=
`2,500` ($)