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?240РaoloSharonPaolo180Van150SharonMarket Price120AmyVan9080AmyCarlos300Carlos0234F7QUANTITY (Tablets)PRCE (Dollars per tablet)210 240Paolo210SharonРaolo180Van150Sharon120AmyVan90Market Price80AmyCarlos30001235678CarlosQUANTITY (Tablets)PRICE (Dollars per tablet)

Question
The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for tablets. The market price of a tablet is shown by the black horizontal line at $120.
 
Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Paolo, green (triangle symbols) for Sharon, purple (diamond symbols) for Van, tan (dash symbols) for Amy, and blue (circle symbols) for Carlos. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a tablet at a market price of $120. (Note: If a person will not purchase a tablet at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)
 
Based on the information on the previous graph, you can tell that____will buy tablets at the given market price, and total consumer surplus in this market will be___
 
Suppose the market price of a tablet decreases to $60.
 
Part 2
On the following graph, use the rectangles once again to shade the areas representing consumer surplus for each person who is willing and able to purchase a tablet at the new market price: orange (square symbols) for Paolo, green (triangle symbols) for Sharon, purple (diamond symbols) for Van, tan (dash symbols) for Amy, and blue (circle symbols) for Carlos. (Note: If a person will not purchase a tablet at the new market price, indicate this by leaving his or her rectangle in its original position on the palette.)
 
Based on the information in the second graph, when the market price of a tablet decreases to $60, the number of consumers willing to buy a tablet    to     , and total consumer surplus
?
240
Рaolo
Sharon
Paolo
180
Van
150
Sharon
Market Price
120
Amy
Van
90
80
Amy
Carlos
30
0
Carlos
0
2
3
4
F
7
QUANTITY (Tablets)
PRCE (Dollars per tablet)
210
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? 240 Рaolo Sharon Paolo 180 Van 150 Sharon Market Price 120 Amy Van 90 80 Amy Carlos 30 0 Carlos 0 2 3 4 F 7 QUANTITY (Tablets) PRCE (Dollars per tablet) 210

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240
Paolo
210
Sharon
Рaolo
180
Van
150
Sharon
120
Amy
Van
90
Market Price
80
Amy
Carlos
30
0
0
1
2
3
5
6
7
8
Carlos
QUANTITY (Tablets)
PRICE (Dollars per tablet)
help_outline

Image Transcriptionclose

240 Paolo 210 Sharon Рaolo 180 Van 150 Sharon 120 Amy Van 90 Market Price 80 Amy Carlos 30 0 0 1 2 3 5 6 7 8 Carlos QUANTITY (Tablets) PRICE (Dollars per tablet)

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check_circleAnswer
Step 1

Part 1

Consumer will consume a good till a point where market price is less than or equal to the marginal willingness to pay and difference between the willingness to pay and the market price is considered as the consumer surplus. The graph below represents the number of buyers who will buy at price $120 and their respective consumer surplus.

240
Paolo
210
Sharon
Рaolo
180
Van
150
Sharon
Market Price
120
Аmy
Van
60
Аmy
Carlos
30
Carlos
3
4
QUANTITY (Tablets)
PRICE (Dollars per tablet)
help_outline

Image Transcriptionclose

240 Paolo 210 Sharon Рaolo 180 Van 150 Sharon Market Price 120 Аmy Van 60 Аmy Carlos 30 Carlos 3 4 QUANTITY (Tablets) PRICE (Dollars per tablet)

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Step 2

From the provided information, three individuals will buy the tablets that are Paolo, Sharon, and Van at $120 as the market price of tablet. Total consumer surplus in this market will be $225.

Consumer Surplus = ($225-$120)+ ($195-$120)+($150 - $120)
= $105+$75+ $30
= S210
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Consumer Surplus = ($225-$120)+ ($195-$120)+($150 - $120) = $105+$75+ $30 = S210

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Step 3

Part 2

 The graph below represents the number of buyers who wil...

240
Paolo
210
Sharon
Paolo
180
Van
150
Sharon
120
Amy
Van
Market Price
60
Amy
Carlos
30
5
7
Carlos
QUANTITY (Tablets)
PRICE (Dollars per tablet)
help_outline

Image Transcriptionclose

240 Paolo 210 Sharon Paolo 180 Van 150 Sharon 120 Amy Van Market Price 60 Amy Carlos 30 5 7 Carlos QUANTITY (Tablets) PRICE (Dollars per tablet)

fullscreen

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