Question: If the inverse demand function for toasters is p = a - bQ , what is the consumer surplus if price is 2 a ?
If the inverse demand function for toasters is p=a-bQ , what is the consumer surplus if price is 2a ? Show it very precisely on a diagram and explain how changes in the constant term (a) and the coefficient of Q (b) cause an increase in the consumer surplus .
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
