1 . Problems and Applications Q4

10 -o- Bob's Demand 7 E E 6 Price=$4 l\" B s 5 'f 8 E 4 Quantity Purchased 3 A Consumer Surplus o 1 2 3 4 5 Quantity of Water Suppose the price of a bottle of water is $4. Use the black line (plus symbol) to draw a price line at $4. Next use the grey point (star symbol) to indicate how many battles of water Bob will buy at that price. Finally, use the green point (triangle symbol) to shade the area that represents Bob's consumer surplus from his purchases. In this case, Bob receives in consumer surplus from his water purchase. If the price falls to $2, Bob now buys |:] bottles of water. This V his consumer surplus to