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Suppose the demand curve for a consumer for coffee is:

Q = 6 – 2P,

where Q represents the number of cups per day and P is the price of coffee per cup. 

Question: Sppose the consumer is at coffee shop 2. Coffee shop 2 provides unlimited cups of coffee for the price of $9.00 per day.

- How many cups would she drink a day and how much would she spend a day at coffee shop 2?  Explain your answer and illustrate it on the graph. Hint: Again, I would draw the demand curve and the incremental price of drinking a cup of coffee at the shop to show the number of cups the consumer chooses.

- What is the consumer surplus and the average price per cup?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9533039

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