Suppose the daily demand curve for gasoline is as provided in
the accompanying graph.
a. ?Calculate the consumer surplus in the market for gasoline
if the market price is $1.60.
Consumer surplus =$
million
b. ?Now suppose the price decreases to $1.20 ?per litre. Move
the price line on the graph to reflect this change, then
calculate the new consumer surplus.
New consumer surplus =$
million
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