If the demand function for apples is P = 1

Question

If the demand function for apples is P = 1 - Q, how much consumer surplus does the consumer gain when the price of the apples equals 5?
A)25
B)5
C)20
D)12.5

Quizplus · Accepted Answer

Consumer surplus is the area of the triangle formed by the demand curve, the price axis, and a line at the price level where the product is purchased. Here, when P = 5, the demand function P = 1 - Q gives a negative quantity, which doesn't make sense in this context. It seems there might be a misunderstanding in the question setup as the given demand function and price level do not align logically for calculating consumer surplus. However, if we consider a typical approach to finding consumer surplus with a correctly aligned demand function and price, it involves finding the area of the triangle under the demand curve above the price paid. Assuming a typo in the price given, and if we were to consider a price where the calculation is feasible, the formula for consumer surplus is 1/2 * base * height, where the base is the quantity and the height is the difference between the maximum price willing to be paid (where quantity is zero) and the actual price paid. Without the correct price that aligns with the demand function, we cannot accurately calculate consumer surplus. The answer provided as D (12.5) would be correct in a scenario where the price and demand function align such that the calculation of a triangular area is applicable.