a. Suppose Rupert were to eat five pizzas per week. What is
the total value Rupert would place on his five weekly
pizzas?
b. If the market price is $10 per pizza, how many pizzas will
Rupert buy and eat per week?
c. If the market price is $10 per pizza, what is the weekly
consumer surplus that Rupert gets from eating pizza?
18. Consider the market for some product. The demand and supply
curves are given by:
a. Plot the demand and supply curves on a scale diagram.
Compute the equilibrium price and quantity
b. Show in the diagram the total value that consumers place
on units of the good.
c. What is the value that consumers place on an additional
unit of the good?
d. Now suppose that production costs fall, and thus the
market supply curve shifts to a new position given by
How do consumers now value an additional
unit of the good?
e. Explain why consumers’ marginal value has fallen even
though there has been no change in their preferences
(and thus no change in the demand curve).Demand:p = 30 − 4 QD
Supply:p = 6 + 2 QS(p∗) (Q∗Q∗p= 2 + 2 QS.