This Question 2 pts This Test 30 pts The graph shows the dem

This Question 2 pts This Test: 30 pts The graph shows the demand curve for baskets and the market price of a basket. With the given demand for baskets, if the price of basket rises from S20 to S30, how does consumer surplus change? Consumer surplus by s Time Remaining 01:20:35 Proe (dollars per basket) Quantity (baskets per day) 0 of 15 complete

Solution

Solution :

The initial consumer surplus at a price of $ 20

Consumer surplus = 1/2 ( 60-0) ( 50-20)

consumer surplus = $ 900

When the price rises from $ 20 to $ 30

The new consumer surplus = 1/2 ( 40-0) ( 50-30)

New consumer surplus = $ 400

Consumer surplus decreases by $ 500 .