Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice cream cones.
-Refer to Figure 4-1.If the market price is $2.50,what is the consumer surplus on the first ice cream cone?

Question

Figure 4-1  Figure 4-1 shows Kendra's demand curve for ice cream cones.
-Refer to Figure 4-1.If the market price is $2.50,what is the consumer surplus on the first ice cream cone?

Quizplus · Accepted Answer

To find the consumer surplus on the first ice cream cone, we need to find the difference between the maximum price that Kendra is willing to pay (which is given by the demand curve) and the market price. In this case, the maximum price Kendra is willing to pay for the first ice cream cone is $3.00 (where the demand curve intersects with the y-axis), and the market price is $2.50. Therefore, the consumer surplus on the first ice cream cone is $0.50 ($3.00 - $2.50 = $0.50). So, option B is correct. Option A, C, and D are incorrect because they do not represent the correct consumer surplus on the first ice cream cone.

Figure 4-1 Figure 4-1 Shows Kendra's Demand Curve for Ice