How does the quantity demanded changes

Reference no: EM131051106

1. What is consumer surplus? How consumer surplus can be measured using a demand curve?

2. Regis is hungry for a snack. Here is the value he places on a cupcake

Regis	Willingness to pay
Value of First cupcake	$5
Value of Second cupcake	$4
Value of Third cupcake	$3
Value of Fourth cupcake	$2

a. From the above schedule, derive the Regis demand schedule diagrammatically.

b. If the price of cupcake is $3.50, how many cupcakes Regis would buy? What would be his consumer surplus?

c. If the price falls to $2.50, how does the quantity demanded changes? What would be his consumer surplus then? Explain with the help of diagram.

Reference no: EM131051106

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