Bob is a drug addict and his demand for cocaine is Q = 100-3p where Q...

Bob is a drug addict and his demand for cocaine is Q = 100-3p where Q is the quantity demanded and p is the price paid. The market price for cocaine is $10 a bag. At this price, what is Bob’s consumer surplus of consuming cocaine?

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Expert Solution

Q = 100 - 3P

So if Q = 0 , we have y intercept as P = 33.33 .

So now if the market price of cocaine is $10 , then .

So at Price = $10 , Q = 100 - 3(10) = 70 units

Consumer surplus = 1/2 * (33.33-10) * 70

= 11.665 * 70 = $816.55 will be consumer surplus

Rahul Sunny answered 1 year ago

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