a. With demand curve D and supply curve the
equilibrium price and quantity in this market are and
At the price what is the area that represents total
consumer surplus in this market? (Use the letter point
labels to describe the area.)
b. Now suppose supply increases to Determine the new
equilibrium price and quantity. What is the area that now
represents total consumer surplus?
c. At the new price, what is the area that represents the
increased consumer surplus earned on the original units
purchased?
d. At the new price, what is the area that represents
consumer surplus earned on the new units purchased?
7. See the diagrams in the next column of this page. Consider the
supply-and-demand diagrams depicting the markets for X and
S 0 ,
p 0
Q 0. p 0 ,S 1.