Sandy's uncompensated demand for candy is given by the equation Q = 15/p,where Q is the quantity of candy and p is the price.When the price of candy rises from $1 to $3,the change in consumer surplus is
A)$16.5.
B)-$20.
C)-$15.
D)$15.

Question

Quizplus · Accepted Answer

The correct answer is A.Explanation:The change in consumer surplus is the area of the triangle formed by the old and new demand curves and the price axis. The base of the triangle is the change in price, which is $3 - $1 = $2. The height of the triangle is the change in quantity demanded, which is 15/3 - 15/1 = 10. The area of the triangle is therefore 1/2 * 2 * 10 = $10. The consumer surplus is the difference between the old and new consumer expenditures, which is 15/1 - 15/3 = $10. Therefore, the change in consumer surplus is $10 - $10 = $0.

Sandy's Uncompensated Demand for Candy Is Given by the Equation