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Suppose that your demand curves for gadgets and widgets are both straight lines but your demand curve for a gadget (DG) is much more elastic than your demand curve for widgets (DW). Each is selling at a market price of $10, and at that price you choose to buy exactly 30 gadgets and 30 widgets.
a. Draw a graph that illustrates your demand and transactions for gadgets and widgets. Show on your graph: (1) both demand curves DG and DW, and (2) your transactions for 30 gadgets and 30 widgets at a price of $10 per unit.
b. From which transaction do you gain more surpluses? Explain or show on your graph for (a).
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