FO our Possible buyers Wil illingness to Pay… Buⅴer Willingness to Pay John $100 Paul 80 George 70 Ringo 50 e Who will get the book? What is the consumer surplus? What about two textbooks?
Four Possible Buyers’ Willingness to Pay... • Who will get the book? What is the consumer surplus? • What about two textbooks? Buyer Willingness to Pay John $100 Paul 80 George 70 Ringo 50
FO our Possible buyers Willingness to Pay… Wi Price Buyer Quantity Demanded More than $100 None 0 s80to$100 John $70to$80 John paul 12 50to$70 John Paul, George 3 S50 or less John Paul 4 George, Ringo
Four Possible Buyers’ Willingness to Pay... Price Buyer Quantity Demanded More than $100 None 0 $80 to $100 John 1 $70 to $80 John, Paul 2 $50 to $70 John, Paul, George 3 $50 or less John, Paul, George,Ringo 4
Measuring Consumer Surplus with the demand curve Price of Album $100 Johns willingness to pay 80 Pauls willingness to pay 70 George's willingness to pay pay Ringos willingness to pay 50 Demand 0 2 4 Q quantity of Albums
Price of Album 50 70 80 0 $100 1 2 3 4 Quantity of Albums John’s willingness to pay Paul’s willingness to pay George’s willingness to pay Ringo’s willingness to pay Demand Measuring Consumer Surplus with the Demand Curve
Measuring Consumer Surplus with the demand curve Price of Album Price=$80 $100 John's consumer surplus($20 80 70 50 Demand 0 2 4 Q quantity of Albums
Measuring Consumer Surplus with the Demand Curve... Price of Album 50 70 80 0 $100 1 2 3 4 Quantity of Albums Demand John’s consumer surplus ($20) Price = $80
Measuring Consumer Surplus with the demand curve Price of Price=$70 Album $100 HJohn's consumer surplus($30) 80 Pauls consumer surplus(10) 70 50 Total consumer surplus($40) Demand 0 2 4 Q quantity of Albums
Price of Album 50 70 80 0 $100 1 2 3 4 Quantity of Albums Demand John’s consumer surplus ($30) Total consumer surplus ($40) Price = $70 Paul’s consumer surplus ($10) Measuring Consumer Surplus with the Demand Curve