Question: . Flintstone has quasilinear preferences and his inverse demand function for Burgers is P ( b ) = 3 0 2 b: He is currently
Flintstone has quasilinear preferences and his inverse demand function for Burgers is Pbb: He is currently consuming burgers at a price of dollars. a How much money would he be willing to pay to have this amount rather than no burgers at all? What is his level of net consumer's surplus? ans: He will be willing to pay $the area under his demand curve up to his consumption of burgers. His consumer's surplus is $the trigular area bounded by the demand and the price he paysb If the price of burgers increases from $ a burger to $ a burger, what is Flintstone's change in consumer's surplus? ans: At price $ consumer's surplus is $ At $ he demands burgers, for net consumer's surplus of The change in consumer's surplus is
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