Practice: Use the graph for funky-fresh rhymes above. If price increases from $3,000 to $5,000 per funky-fresh rhyme, what is the change to consumer surplus?
Let's analyze some details about the demand curve.
Concept #1: Consumer Surplus in a Small Setting
Concept #2: Consumer Surplus and Market Demand
Example #1: Consumer Surplus
Practice: Kanye West is ready to create his next hit single. He knows that he is willing to pay up to $3,000 for a funky fresh rhyme, and that he will need a total of ten funky fresh rhymes to create his hit single. After rounding up his best ghostwriters, he summarized the following schedule. If Kanye values all funky-fresh rhymes equally, what is his maximum consumer surplus?
Practice: The demand curve for Nickelback’s new album is downward sloping. At a price of $2, nationwide demand is 100 albums. If the price rises to $3, what happens to consumer surplus?
