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Understanding Consumer Surplus and Price Elasticity of Demand

Analyzing consumer surplus at a market price of $6/lb and calculating own-price elasticity of demand with a given demand function.

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Understanding Consumer Surplus and Price Elasticity of Demand

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  1. $ per Pound $10 $6 5,000 Pounds EQ # 5 – AGEC 105 – September 26, 2011 (2pts) 1. According to this diagram pertaining to the demand curve for shrimp for a local retailer, when the market price for shrimp is $6/lb, what is the consumer surplus? Show all work. Be careful of your units of measurement. (2pts) 2. Consider the following demand function. Calculate the own-price elasticity of demand. P A $4 B $2 Q 16 24

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