Question

Melissa buys an iPhone for $240 and gets consumer surplus of $160. 1. .What is her...

Melissa buys an iPhone for $240 and gets consumer surplus of $160.

1. .What is her willingness to pay?

2. If she had bought the iPhone on sale for $180, what would her consumer surplus have been?

3. What happens to her consumer surplus if the price of an iPhone was $500?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Since the consumer surplus is the area below the demand curve and above the price. In other words, the consumer surplus is the difference of maximum willingness to pay for any good and price of that good.

Demand curve shows the maximum willingness to pay for any goods or services.

CS= maximum willingness to pay- actual price

160= maximum willingness to pay- 240

maximum willingness to pay=160+240

=$400

2.

If she had bought the iPhone on sale for $180,

CS=400-180

=$220

3.

If the price of an iPhone was $500 and her maximum willingness to pay is $400, then Melissa will not purchase iPhone, so there will be no consumer surplus.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Melissa buys an iPhone for $240 and gets consumer surplus of $160. a. What is her...
Melissa buys an iPhone for $240 and gets consumer surplus of $160. a. What is her willingness to pay? b. If she had bought the iPhone on sale for $180, what would her consumer surplus have been? c. If the price of an iPhone were $500, what would her consumer surplus have been?
Melissa buys an iPhone for $240 and gets consumer surplus of $160. What is her willingness...
Melissa buys an iPhone for $240 and gets consumer surplus of $160. What is her willingness to pay? If she had bought the iPhone on sale for $180, what would her consumer surplus have been? If the price of an iPhone were $500, what would her consumer surplus have been? Please show your answers clearly.
2. (a.) What is consumer surplus and how is it measured? (b.) What is the relationship...
2. (a.) What is consumer surplus and how is it measured? (b.) What is the relationship between the demand curve and the willingness to pay? (c.) With the aid of a demand curve, explain what happens to consumer surplus if the price of a good falls, other things unchanged
1. John buys a slice of pizza for 4.66 dollars, and his consumer surplus is 0.57...
1. John buys a slice of pizza for 4.66 dollars, and his consumer surplus is 0.57 dollars. How much is John willing to pay for the slice of pizza? 2.Kate drinks Pepsi. She can buy as many cans of Pepsi as she wishes at a price of $ 0.98 per can. On a particular day, she is willing to pay $ 2.49 for the first can, $1.20 for the second can, $1.00 for the third can, and $0.40 for the...
What is the motivation for calculating consumer surplus, producer surplus, and total surplus? Assume the equilibrium...
What is the motivation for calculating consumer surplus, producer surplus, and total surplus? Assume the equilibrium quantity in a competitive market is 16 and the equilibrium price is 8. Also assume the highest willingness to pay is 14 and the lowest cost is 3. Calculate the consumer surplus, producer surplus, and total surplus for this market.
1. Define both "consumer surplus" and "producer surplus". 2. Determine the amount of consumer surplus generated...
1. Define both "consumer surplus" and "producer surplus". 2. Determine the amount of consumer surplus generated in the following situation: Robert goes to a Subway store to buy a "footlong tuna sandwich" for which he is willing to pay the usual $8. When he is paying for it, he learns that the "footlong tuna sandwich" is discounted by 25%. 3. Determine the amount of producer surplus generated in the following situation: Cynthia lists her acoustic guitar on eBay. She sets...
Suppose that the price of a good decreases and therefore the Consumer Surplus increases. This is...
Suppose that the price of a good decreases and therefore the Consumer Surplus increases. This is due to: buyers leaving the market and remaining buyers paying a higher price. buyers entering the market and remaining buyers paying a higher price. buyers leaving the market and remaining buyers paying a lower price. buyers entering the market and remaining buyers paying a lower price. 2. In the market for cars, the government levies a new tax on buyers. In this market, the...
A college student enjoys drinking hand-crafted ginger beer. Her willingness to pay for each bottle is...
A college student enjoys drinking hand-crafted ginger beer. Her willingness to pay for each bottle is shown in the following table. Number of bottles Willingness to pay (per bottle) 1 $5 2 $4 3 $3 4 $2 5 $1 6 $0 1st attempt Part 1(2 pts) See Hint If a bottle of hand-crafted ginger beer costs $2, how many bottles will the student buy?      bottles of hand-crafted ginger beer.   How much consumer surplus will she enjoy? Assume that the student...
(40)Which of the following statements is true? Suppose a government in a city imposes a binding...
(40)Which of the following statements is true? Suppose a government in a city imposes a binding price ceiling on a market for strawberries, it would be reasonable to expect: (a)A decrease in consumers’ surplus (b)An increase in consumer’s surplus (c)An increase in producers’ surplus (d)None of the above (41)Consumers’ surplus is measured by: (a)The area above the demand curve and below the actual price (b)The area below the demand curve and above the willingness to pay price (c)(a) and (b)...
In a market with numerous sellers and buyers demand is given by p=240-8q and supply is...
In a market with numerous sellers and buyers demand is given by p=240-8q and supply is p=4+12q. 1. Find the equilibrium price and quantity. 2. Mathematically find the values for consumer and producer surplus. 3. What is the deadweight loss in this market? 4. Suppose instead a monopolist served these same buyers, and the monopolist had marginal cost curve 4+12q. a. Show graphically the consumer surplus that consumers have lost due to monopoly. b. Consumer surplus is lower for two...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT