Answer to Question #184700 in Microeconomics for Nooria Maqsood

Question

For the following market demand curve:

A. Find marginal buyer’s WTP at Q = 15.

B. Find CS for P = $35.

C. Suppose P decreases to $10. How much will CS increase due to…

● Buyers who enter the market

● Existing buyers paying lower price.

Answer 1

A. A buyer's willingness to pay for a good is the maximum amount the buyer will pay for that good. 

B. Consumer surplus is the difference between price consumers pay and what they would be willing to pay.

C. If P decreases to $10, then CS will increase either due to buyers who enter the market or due to existing buyers paying lower price.