-The above figure shows the market demand curve for telecommunication while driving one's car (time spent on the car phone).The current price is 35¢ per minute.What is the consumer surplus at the current price?
A)924.5
B)1075
C)301
D)1250

Question

-The above figure shows the market demand curve for telecommunication while driving one's car (time spent on the car phone).The current price is 35¢ per minute.What is the consumer surplus at the current price?
A)924.5 
B)1075 
C)301 
D)1250

Quizplus · Accepted Answer

Consumer surplus is the area between the demand curve and the price level, up to the quantity demanded. In this case, it's the area of a triangle with a base (quantity) of 39 (from 0 to 39 on the horizontal axis) and a height (price difference from the highest willingness to pay to the current price) of 47.5¢ (from 82.5¢ to 35¢). The formula for the area of a triangle is 1/2 * base * height, so the consumer surplus is 1/2 * 39 * 47.5 = 924.5.

-The Above Figure Shows the Market Demand Curve for Telecommunication