Question

The following graph shows the monthly demand functions for a particular good such as a particular kind of pizza pertaining to two consumers; Mrs. Brown and Mr. Blue. Mr. Blue does not care that much for this kind of pizza. Mrs. Brown, on the other hand, loves this pizza and believes that it is the best invention in the history of humankind. Currently the price of this pizza is $14 per unit and they are both buying 10 pizzas per month. Therefore, they are both spending $140 per month on pizza ($14 x 10 pizzas). Use the formulas for geometric areas to calculate the items like consumer surplus, total willingness to pay, or consumer expenditure. Enter your answers on Canvas without dollar signs, commas, or decimal places. $54 $52 $42 $38 $36 Mrs. Brown $30 $22 $18 $16 $14 $12 $10 Mr. Blue $6 $2 $0 12 14 16 Quantity of Pizza Demanded

Answer 1

In the diagram above, Consumer surplus of Mr. Blue = ar (angle DBC) = 1/2 times 10 times (24 - 14) = 1/2 times 10 times 10 = $50 Total willingness to pay per pizza = $24 Mr. Blue�s current expenditure = 10 times 4 = $140 Mrs. Brown. Consumer surplus = ar (angle ABC) = 1/2 times 10 times (54 - 14) = 1/2 times 10 times 40 = 1200 Total willingness to pay per pizza = $54 Current expenditure = 10 times 14 = $140