This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Jenn is willing to pay 75 for a purse and the purse's price is 60. What is Jenn's consumer surplus? ... (Read 113 times)

123654777

  • Hero Member
  • *****
  • Posts: 585
on: Jun 29, 2018
Jenn is willing to pay 75 for a purse and the purse's price is 60. What is Jenn's consumer surplus?
 
  What will be an ideal response?

Question 2

Can electric utility companies always raise their total revenue by raising their rates?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

aruss1303

  • Sr. Member
  • ****
  • Posts: 314
Reply #1 on: Jun 29, 2018
Answer to Question 1

The consumer surplus equals the difference between the marginal benefit of the good and the price actually paid. Jenn is willing to pay 75 for the purse, so its marginal benefit to her is 75. However, she only must pay 60, so Jenn has a consumer surplus of 75 - 60 = 15.

Answer to Question 2

No. As electric companies continue to raise rates, customers move up along their demand curves for electricity, obeying the law of demand. As they do, they eventually enter an elastic portion of their demand curves, along which total revenue will decrease when rates increase further.


123654777

  • Member
  • Posts: 585
Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

Jossy

  • Member
  • Posts: 336
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

If you could remove all of your skin, it would weigh up to 5 pounds.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

Calcitonin is a naturally occurring hormone. In women who are at least 5 years beyond menopause, it slows bone loss and increases spinal bone density.

Did you know?

Street names for barbiturates include reds, red devils, yellow jackets, blue heavens, Christmas trees, and rainbows. They are commonly referred to as downers.

Annual Federal Deficit (or Surplus), 1992–2016 Annual Federal Deficit (or Surplus), 1992–2016
Purse cover, from the Sutton Hoo burial ship. Purse cover, from the Sutton Hoo burial ship.
U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994 U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994
US federal budget deficit/surplus and debt US federal budget deficit/surplus and debt
The retail price of a packaged CD is $60.00, which includes a tax of 4%. What is the actual ... The retail price of a packaged CD is $60.00, which includes a tax of 4%. What is the actual ...
Refer to Scenario 3.1. If the price of potato chips is $0.50 and the price of Cola is $4.00, ... Refer to Scenario 3.1. If the price of potato chips is $0.50 and the price of Cola is $4.00, ...
Video: Neuron Structure Animation

For a complete list of videos, visit our video library