Consider the market for electric vehicles. The market price of each electric vehicle is $200,000, and each consumer demands no more than oneelectric vehicle.Suppose that Jake is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $350,000. Based on Jake'swillingness to pay, the following graph shows his demand curve for electric vehicles.Shade the area representing Jake's consumer surplus using the green rectangle (triangle symbols).PRICE (Thousands of dollars)400Jake's Demand35030025020015010050Market Price00345QUANTITY (Electric vehicles)Jake's Consumer SurplusNow, suppose another buyer, Latasha, enters the market for electric vehicles, and her willingness to pay is $250,000.Based on Latasha's and Jake's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circlesymbol). Next, shade Jake's consumer surplus using the green rectangle (triangle symbols), and shade Latasha's consumer surplus using the purplerectangle (diamond symbols).Note: Plot your points as a step function in the order in which you would like them connected. Line segments will connect the points automatically.PRICE (Thousands of dollars)400350300Demand Curve250Jake's Consumer SurplusMarket Price200150Latasha's Consumer Surplus100500034QUANTITY (Electric vehicles)Suppose Nick is willing to pay a total of $150,000 for an electric vehicle.True or False: Keeping his maximum willingness to pay for an electric vehicle in mind, Nick will not buy the electric vehicle because it would be worthless to him than its market price of $200,000.TrueO False

Consumer surplus is the difference between the cost they actually pay and the cost they are willing…

Consider the market for electric vehicles. The market price of each electric vehicle is $200,000, and each consumer demands no more than one electric vehicle. Suppose that Jake is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $350,000. Based on Jake's willingness to pay, the following graph shows his demand curve for electric vehicles. Shade the area representing Jake's consumer surplus using the green rectangle (triangle symbols).

Consider the market for electric vehicles. The market price of each electric vehicle is $200,000, and each consumer demands no more than one electric vehicle. Suppose that Jake is the only consumer in the electric vehicle market. Their willingness to pay for an electric vehicle is $350,000. Based on Jake's willingness to pay, the following graph shows his demand curve for electric vehicles. Shade the area representing Jake's consumer surplus using the green rectangle (triangle symbols).

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter6: Demand Relationships Among Goods

Section: Chapter Questions

Problem 6.4P

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