Optons The folowing graph shows Darnells weekly demand for p

Optons- The folowing graph shows Darnell\'s weekly demand for pizza, represented by the blue line. Point A represents a The market price of pizza is $1.25 per slice, as shown by the horizontal black line point along his weekly demand curve. Darnell\'s Weekly Demand 2 50 Demand 1.78 Price 0.75 QUANTITY (sices of pizza) for his 8th slce of pizza each week. Because he has to pay only $1.25 From the previous graph, you can tell that Darnell is willing to pay per slice, the consumer surplus he gains from the 8th slice of pizza is from the sth Suppose the price of pizza were to fall to $1.00 per slice. At this lower price, Darnell would receive a consumer surplus of S slice of pizza he buys. The following graph shows the weekly market demand for pizza in a small economy Use the purple point (diamond symbol) to shade the area representing consumer surpius when the price () of pizza is si.25 per sice, Ther, use the green point (triangle symbol) to shade the area representing additional consumer surplus when the price favls to $1.00 per slice. up

Solution

Darnell is willing to pay $1.50 for his 8^th slice of pizza. The consumer surplus he gains from the 8^th slice of pizza is $0.25. (1.5 – 1.25)

At a lower price of $1.00, Darnell would receive a consumer surplus of $0.5 from the 8^th slice of pizza that he buys. (1.5 – 1.00)