Now, suppose another buyer, Eileen, enters the market for antique cars, and her willingness to pay is $330,000.Based on Eileen's and Clancy's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circlesymbol). Next, shade Clancy's consumer surplus using the green rectangle (triangle symbols), and shade Eileen's consumer surplus using the purplerectangle (diamond symbols).Note: Plot your points as a step function in the order in which you would like them connected. Line segments will connect the points automatically.PRICE (Thousands of dollars)44038533027522016511055001True23QUANTITY (Antique cars)O FalseMarket Price4Suppose Hubert is willing to pay a total of $165,000 for an antique car.5Demand CurveClancy's Consumer SurplusTrue or False: Keeping his maximum willingness to pay for an antique car in mind, Hubert will not buy the antique car because it would be worth lessto him than its market price of $220,000.Eileen's Consumer Surplus 2. Individual demand and consumer surplusConsider the market for antique cars. The market price of each antique car is $220,000, and each buyer demands no more than one antique car.Suppose that Clancy is the only consumer in the antique car market. His willingness to pay for an antique car is $385,000. Based on Clancy'swillingness to pay, the following graph shows his demand curve for antique cars.Shade the area representing Clancy's consumer surplus using the green rectangle (triangle symbols).PRICE (Thousands of dollars)44038533027522016511055001Clancy's Demand23QUANTITY (Antique cars)Market Price45Clancy's Consumer Surplus

Consumer surplus is the area below demand curve and above price. The consumer surplus can be…

2. Individual demand and consumer surplus Consider the market for antique cars. The market price of each antique car is $220,000, and each buyer demands no more than one antique car. Suppose that Clancy is the only consumer in the antique car market. His willingness to pay for an antique car is $385,000. Based on Clancy's willingness to pay, the following graph shows his demand curve for antique cars. Shade the area representing Clancy's consumer surplus using the green rectangle (triangle symbols). PRICE (Thousands of dollars) 440 385 330 275 220 165 110 55 0 0 1 Clancy's Demand 2 3 QUANTITY (Antique cars) Market Price 4 5 Clancy's Consumer Surplus

2. Individual demand and consumer surplus Consider the market for antique cars. The market price of each antique car is $220,000, and each buyer demands no more than one antique car. Suppose that Clancy is the only consumer in the antique car market. His willingness to pay for an antique car is $385,000. Based on Clancy's willingness to pay, the following graph shows his demand curve for antique cars. Shade the area representing Clancy's consumer surplus using the green rectangle (triangle symbols). PRICE (Thousands of dollars) 440 385 330 275 220 165 110 55 0 0 1 Clancy's Demand 2 3 QUANTITY (Antique cars) Market Price 4 5 Clancy's Consumer Surplus

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 3.7P

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