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2. Individual demand and consumer surplus Consider the market for yachts. The market price of each yacht is $375,000, and each buyer demands no more than one yacht. Suppose that Rajiy is the onlyr consumer in the yacht market. His willingness to pay for a yacht is $600,000. Based on Rajiy's willingness to pay, the following graph shows his demand curve For yachts. Shade the area representing Raji'v's consumer surplus using the green rectangle (triangle symbols). C?) Raiv's Demand 500 H Rajiy'e Consumer Surplus 525 150 Market Price 3 T5 300 225 PRICE (Thousands ofdollars) 150 1'5 D '1 2 3 4 5 aumnrn' mum} Now, suppose another buyer, Simone, enters the market for yachts, and her willingness to pay is $450,000. Based on Simone's and Rajiv's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circie symboU. Next; shade Rajiv's consumer surplus using the green rectangle (triangle symbols), and shade Simone's consumer surpius using the purple rectangle (diamond symbols]. Note: Plot your points as a step function in the order in which you would like them connected. Line segments will connect the points automatically. 600 -O- 525 Demand Curve H Raiiu'e Consumer Surplus H Simone's Consumer Surplus 450 3?!' 300 22!) PRICE (T housands ofdollars) 15!]I 75 QUANTITY {Yachts} Suppose Yakov is willing to pay a total cf $300,000 For a yacht. True or False: Keeping his maximum willingness to clayI for a yacht in mind, Yakcv will buy the yacht because it would be worth more to him than its market price of $375,000. 0 True 0 False