Question

1. If the "rate of users purchasing of A company" as surge prices increase, how would we represent A company surge pricing on demand curve?

Would this increase in price result in a shift in the demand curve or a movement along the demand curve? What would this do to consumer surplus? How do you know?

2. If the concert letting out, and due to the concert, the demand for rides increase. How it change in the graph?

What would you expect to the happen to the equilibrium price and quantity of rides?

3. Based on 2, what would happen if the price were not able to rise? Would the original price continue to be the equilibrium price in the market after the concert? If A company did not raise it(rides) prices, would that result in a shortage, surplus, or neither?

4.  What incentives do “surge prices” provide to consumers? Producers?

Answer 1

Ans 1 upward movement along demand curve

there will be rise in consumer surplus explaination is in image

Ans 2right ward shift of demand curve

rise in equilibrium price and quantity of ride explaination is in image 2nd

Ans 3 it will result shortage of rides due to excess demand

Ans 4 There will be rise in consumer surplus as well as producer surplus explaination in image 3Ans 4both consumer and producers surplus will rise .explaination is given in image