ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw

Exercise 4

It is a hot day, and Bert is thirsty. Here is the value he places on a bottle of water:

a. From this information, derive Bert's demand schedule. Graph his demand curve for bottled water.
b. If the price of a bottle of water is $4, how many bottles does Bert buy? How much consumer surplus does Bert get from his purchases? Show Bert's consumer surplus in your graph.
c. If the price falls to $2, how does quantity demanded change? How does Bert's consumer surplus change? Show these changes in your graph.