Question #195702

Question 2. It is a hot day, and Bert is thirsty. Here is the value he places on each bottle of water:

Value of first bottle $7 Value of second bottle$5

Value of third bottle $3 Value of fourth bottle$1

A)From this information, derive Bert’s demand schedule. Graph his demand curve for bottled water.

B)If the price of a bottle of water is $4, how many bottles does Bert buy? How much consumer surplus does Bert get from his purchases? Show Bert’s consumer surplus in your graph. 1 Expert's answer 2021-05-20T18:45:39-0400 Represent the demand Schedule as follows: Represent the graph as follows : If the price of the bottle of water is$4, person B buys 2 bottles (as per the demand Schedule)

Hence the Consumer Surplus ;

=Price willing to pay Price actually paid

=((7+5) 4×2)=$4 Consumer Surplus =$4. (AEGHI is the Consumer Surplus in the above graph)

c) Consumer Surplus =(7+5+3) (3×2)=\$9

(The Consumer Surplus is ABCJG)

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