Question: It is hot day, and Bert is thirsty, here is the value he places on a 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.
c) If the price falls to $2, how does quantity demanded change? How does Bert's consumer surplus change? Show these changes in your graph?