4. Consumer surplus for an individual and a market The following graph shows Clancy's weekly demand for cheesecake, represented by the blue line. Point A represents a point along his weekly demand curve. The market price of cheesecake is $3.00 per slice, as shown by the horizontal black line. Clancy's Weekly Demand 7.50 6.75 6.00 5.25 Demand T4.50 3.75 Price 3.00- 2.25 1.50 0.75T 0 24 6 80 12 14 6 18 20 QUANTITY (Slices of cheesecake) From the previous graph, you can tell that Clancy is willing to pay $ has to pay only $3.00 per slice, the consumer surplus he gains from the 8th slice of cheesecake is for his 8th slice of cheesecake each week. Because he Suppose the price of cheesecake were to fall to $2.25 per slice. At this lower price, Clancy would receive a consumer surplus of from the 8th slice of cheesecake he buys. The following graph shows the weekly market demand for cheesecake in a small economy Use the purple point (diamond symbol) to shade the area representing consumer surplus when the price (P) of cheesecake is $3.00 per slice. Then, use the green point (triangle symbol) to shade the area representing additional consumer surplus when the price falls to $2.25 per slice Small Economy's Weekly Demand 7.50 6.75 Initial Consumer Surplus (P $3.00) 6.00 5.25Demand 4.50 Additional Consumer Surplus (P $2.25) 3.75 P $3.00 3.00 2.25 P $2.25 1.50 0.75 0 20 40 60 80 100 120 140 160 180 200 QUANTITY (Thousands of slices of cheesecake)