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  3. 2 individual demand and consumer surplus consider the market for...

Question: 2 individual demand and consumer surplus consider the market for...

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2. Individual demand and consumer surplus Consider the market for apartments. The market price of each apartment is $180,000, and each buyer demands no more than one apartment. Suppose that Kenji is the only consumer in the apartment market. His willingness to pay for an apartment is $315,000. Based on Kenjis willingness to pay, the following graph shows his demand curve for apartments Shade the area representing Kenjis consumer surplus using the green rectangle (triangle symbols) 360 Kenjis Demand 315 Kenjis Consumer Surplus 270 225 Market Price 180 135 0: 0 90 45 QUANTITY (Apartments) Now, suppose another buyer, Lucia, enters the market for apartments, and her willingness to pay is $225,000 Based on Lucias and Kenjis respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol) Next, shade Kenjis consumer surplus using the green rectangle (triangle symbols), and shade Lucias consumer surplus 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 automaticallyNow, suppose another buyer, Lucia, enters the market for apartments, and her willingness to pay is $225,000 Based on Lucias and Kenjis respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol) Next, shade Kenjis consumer surplus using the green rectangle (triangle symbols), and shade Lucias consumer surplus 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 360 315 Demand Curve 270 225 Kenjis Consumer Surplus Market Price 180 135 Lucias Consumer Surplus 0 90 45 QUANTITY (Apartments) Suppose Paolo is willing to pay a total of $135,000 for an apartment. True or False: Keeping his maximum willingness to pay for an apartment in mind, Paolo will not buy the apartment because it would be worth less to him than its market price of $180,000 True O False

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