? Andrew's Weekly Demand 7.50 6.75 6.00 5.25 Demand 4.50 3.75 Price 3.00 2.25 1.50 0.75 0 8 0 2 4 6 10 12 14. 16 18 20 QUANTITY (Slices of apple pie) PRICE (Dollars per slice) (?) Small Economy's Weekly Demand 7.50 6.75 Initial Consumer Surplus (P $3.00) 6.00 A Demand 5.25 Additional Consumer Surplus (P $2.25) 4.50 3.75 P $3.00 3.00 2.25 P $2.25 1.50 0.75 0 40 80 100 120 140 160 180 200 QUANTITY (Thousands of slices of apple pie) 60 20 PRICE (Dollars per slice)

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter2: The One Lesson Of Business
Section: Chapter Questions
Problem 9MC
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The following graph shows Andrew's weekly demand for apple pie, represented by the blue line. Point A represents a point along his weekly demand curve. The market price of apple pie is $3.00 per slice, as shown by the horizontal black line.

(Part 2)
From the previous graph, you can tell that Andrew is willing to pay
for his 8th slice of apple pie each week. Because he has to pay only $3.00 per slice, the consumer surplus he gains from the 8th slice of apple pie is
 
Suppose the price of apple pie were to fall to $2.25 per slice. At this lower price, Andrew would receive a consumer surplus of
from the 8th slice of apple pie he buys.
 
The following graph shows the weekly market demand for apple pie in a small economy.
 
Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of apple pie is $3.00 per slice. Then, use the green point (triangle symbol) to shade the area representing additional consumer surplus when the price falls to $2.25 per slice.
?
Andrew's Weekly Demand
7.50
6.75
6.00
5.25
Demand
4.50
3.75
Price
3.00
2.25
1.50
0.75
0
8
0
2
4
6
10
12
14.
16
18
20
QUANTITY (Slices of apple pie)
PRICE (Dollars per slice)
Transcribed Image Text:? Andrew's Weekly Demand 7.50 6.75 6.00 5.25 Demand 4.50 3.75 Price 3.00 2.25 1.50 0.75 0 8 0 2 4 6 10 12 14. 16 18 20 QUANTITY (Slices of apple pie) PRICE (Dollars per slice)
(?)
Small Economy's Weekly Demand
7.50
6.75
Initial Consumer Surplus (P
$3.00)
6.00
A
Demand
5.25
Additional Consumer Surplus (P $2.25)
4.50
3.75
P $3.00
3.00
2.25
P $2.25
1.50
0.75
0
40
80
100
120
140
160
180
200
QUANTITY (Thousands of slices of apple pie)
60
20
PRICE (Dollars per slice)
Transcribed Image Text:(?) Small Economy's Weekly Demand 7.50 6.75 Initial Consumer Surplus (P $3.00) 6.00 A Demand 5.25 Additional Consumer Surplus (P $2.25) 4.50 3.75 P $3.00 3.00 2.25 P $2.25 1.50 0.75 0 40 80 100 120 140 160 180 200 QUANTITY (Thousands of slices of apple pie) 60 20 PRICE (Dollars per slice)
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