-The above figure shows the market demand curve for telecommunication while driving one's car (time spent on the car phone) .At the current price of $0.35 per minute,consumer surplus equals

Question

-The above figure shows the market demand curve for telecommunication while driving one's car (time spent on the car phone).At the current price of $0.35 per minute,consumer surplus equals

Quizplus · Accepted Answer

Consumer surplus is the area between the demand curve and the price level, up to the quantity demanded. At $0.35 per minute, the quantity demanded is 3500 minutes (from the demand curve, not shown in the question). The area of the triangle representing consumer surplus is 1/2 * base * height = 1/2 * 3500 * $0.53 (difference between the highest price someone is willing to pay, $0.88, and the current price, $0.35). This calculation equals $924.50.

-The Above Figure Shows the Market Demand Curve for Telecommunication