The graph shows the demand curve foe wallets and the market
The graph shows the demand curve foe wallets and the market price of a wallet. If demand doubles, consumer surplus
Solution
Consumer surplus (CS) is the area between demand curve and price.
Current CS = (1/2) x $(16 - 12) x 30 = (1/2) x $4 x 30 = $60
If demand doubles, when price is $12, demand will be (30 x 2) = 60 units.
Revised CS = (1/2) x $(16 - 12) x 60 = (1/2) x $4 x 60 = $120
So consumer surplus increases by $(120 - 60) = $60.
