The following figure illustrates the market demand curve for wine.

-Refer to the figure above.What is the loss in the market-wide consumer surplus when the price of wine changes from $9 per bottle to $18 per bottle?
A) $144,000
B) $30,000
C) $57,000
D) $0

Question

The following figure illustrates the market demand curve for wine.
 
-Refer to the figure above.What is the loss in the market-wide consumer surplus when the price of wine changes from $9 per bottle to $18 per bottle?
A) $144,000 
B) $30,000 
C) $57,000 
D) $0

Quizplus · Accepted Answer

To calculate the loss in market-wide consumer surplus, we need to calculate the area of the triangle formed by the new price of $18 per bottle, the original price of $9 per bottle, and the quantity demanded at each price. This triangle has a height of 60 (difference in quantity demanded between the two prices) and a base of 1,900 (difference in price divided by the slope of the demand curve, which is -20). Therefore, the area of the triangle is 0.5 x 60 x 1,900 = $57,000.

The Following Figure Illustrates the Market Demand Curve for Wine