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If the actual market price of potato chips is $2.50, and steve buys five bags as shown, what is the value of his consumer surplus?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If the actual market price of potato chips is $2.50, and steve buys five bags as shown, what is the value of his consumer surplus?

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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