Microeconomics

Learn the toughest concepts covered in Microeconomics with step-by-step video tutorials and practice problems by world-class tutors

Consumer and Producer Surplus; Price Ceilings and Floors

Consumer Surplus and Willingness to Pay

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Let's analyze some details about the demand curve.

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concept

Consumer Surplus in a Small Setting

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14m
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concept

Consumer Surplus and Market Demand

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6m
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example

Consumer Surplus

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3m
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Problem

Use the graph for funky-fresh rhymes above. If price increases from $3,000 to $5,000 per funky-fresh rhyme, what is the change to consumer surplus? 


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Problem

Kanye West is ready to create his next hit single. He knows that he is willing to pay up to $3,000 for a funky fresh rhyme, and that he will need a total of ten funky fresh rhymes to create his hit single. After rounding up his best ghostwriters, he summarized the following schedule. If Kanye values all funky-fresh rhymes equally, what is his maximum consumer surplus? 

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Problem

The demand curve for Nickelback’s new album is downward sloping. At a price of $2, nationwide demand is 100 albums. If the price rises to $3, what happens to consumer surplus?