Question

Diana has the following demand for pineapples:

Q p = 50 - 5 p

What is the change in consumer surplus when the price of pineapples changes from p = 2 to p = 10 . Round your answer to 4 decimal places.

Answer 1

We know Consumer Surplus (CS) is given by the formula :-

As, Given

Q = 50 - 5P

So,

5P = 50 - Q

P = 10 - Q/5

So, P(Q) = 10 - Q/5

Now,

Lets calculate Consumer surplus for each case :-

When P = 2

So, Q = 50 - (5*2)

Q = 50 - 10

Q = 40

So,

Now,

When P = 10

So, Q = 50 - (5*10)

Q = 50 - 50

Q = 0

So,

​​​​​​

So, From above results we can see that the change in Consumer Surplus when price of pineapples changes from P = 2 to P = 10 is :-

Change in Consumer Surplus = 0 - 160 = -160