3. Consumer surplus for a group of consumers

The following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for smartphones. The market price of a smartphone is shown by the black horizontal line at $150.

Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Lorenzo, green (triangle symbols) for Neha, purple (diamond symbols) for Sam, tan (dash symbols) for Teresa, and blue (circle symbols) for Andrew. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a smartphone at a market price of $150. (Note: If a person will not purchase a smartphone at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)

Based on the information on the previous graph, you can tell that __________ (1 Consumer, 2 Consumer, 3 Consumer, 4 Consumer, 5 Consumer) will buy smartphones at the given market price, and total consumer surplus in this market will be $_____

Suppose the market price of a smartphone increases to $250.

On the following graph, use the rectangles once again to shade the areas representing consumer surplus for each person who is willing and able to purchase a smartphone at the new market price: orange (square symbols) for Lorenzo, green (triangle symbols) for Neha, purple (diamond symbols) for Sam, tan (dash symbols) for Teresa, and blue (circle symbols) for Andrew. (Note: If a person will not purchase a smartphone at the new market price, indicate this by leaving his or her rectangle in its original position on the palette.)

Based on the information in the second graph, when the market price of a smartphone increases to $250, the number of consumers willing to buy a smartphone __________ (Decreases, Increases) to __________ ((1 Consumer, 2 Consumer, 3 Consumer, 4 Consumer, 5 Consumer)) , and total consumer surplus ___________ (Decreases, Increases) to $_______

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400 Lorenzo 350 Lorenzo Neha 300 250 Neha Sam 200 Market Price 150 Sam Teresa 100 Teresa 50 Andrew 4 Andrew QUANTITY (Smartphones) 400 Lorenzo 350 Lorenzo Neha 300 Market Price 250 Neha Sam a 200 Sam 150 Teresa 100 Teresa 50 Andrew 4 Andrew QUANTITY (Smartphones)