The following graph shows Ana\'s weekly demand for pizza, represented by the blu

Question

The following graph shows Ana's weekly demand for pizza, represented by the blue line. Point A represents a point along her weekly demand. The market price of pizza is $1.25 per slice, as shown by the horizontal black line.

Ana's Weekly Demand 2.50 Demand 2.25 2.00 o 1.75 1.50 1.25 1.00 0.75 0.50 0.25 Price 0 2 46 810 12 14 16 18 20 QUANTITY (Slices of pizza) From the previous graph, you can tell that Ana is wiling to pay$ slice, the consumer surplus she gains from the 8th slice of pizza is$ for her 8th slice of pizza each week. Since she has to pay only $1.25 per

Explanation / Answer

B = Quantity which is 8, H = Highest WTP - Price ( 2.50 - 1.5) and L = 1.50 - 1.25 = .25

= 0.25x 8 + 1/2 x 8 x 1 => 2 + 4 => 6

3. At &1, Area of rectangle will raise due ti increase in L ( 1.50 -1)= 0.50 x 8 => 4

Consumer Surplus = 4 + 4 = 8

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