There are three groups of citizens who visit a beach. Group C, which is the farthest away, has to pay $100 to visit the beach for a day. Group B has to pay $75, and group A, the closest, has to pay $25. Group C visits the beach 2 times per year, group B visits 7 times per year, and group A visits 12 times per year. Assume that there are 100 individuals in each group, and that all individuals across groups are identical, except for their distance to the beach. Use this information to extrapolate and plot the demand curve for beach days for an individual (as was done in class and in the book); you can assume that if the cost was $110 then no trips would be taken. Then, calculate the total consumer surplus generated by the beach.

There are three groups of citizens who visit a beach. Group C, which is the farthest away, has to pay $100 to visit the beach for a day. Group B has to pay $75, and group A, the closest, has to pay $25. Group C visits the beach 2 times per year, group B visits 7 times per year, and group A visits 12 times per year. Assume that there are 100 individuals in each group, and that all individuals across groups are identical, except for their distance to the beach. Use this information to extrapolate and plot the demand curve for beach days for an individual (as was done in class and in the book); you can assume that if the cost was $110 then no trips would be taken. Then, calculate the total consumer surplus generated by the beach.

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter20: Income Inequality And Poverty

Section: Chapter Questions

Problem 4CQQ

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