1. Consumer's Surplus (12 points).

Suppose the price for a laptop is $1500. Although the price is $1500, there are likely

to be consumers who could pay a price higher than this equilibrium price of $1500.

a. If there is one consumer who would pay a price of $2000, a second who would pay a price of $1800, a third who would pay a price of $1650, and a fourth who would pay a price of $1500, solve for the total consumer's surplus that would arise from these four consumers.

b. Why is the consumer's surplus considered to be a market failure?