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Andrew has the following marginal values for apples and oranges consumed per week (For this problem, assume Andrew can only buy apples and oranges in whole units, i.e. use the discrete values given

Andrew has the following marginal values for apples and oranges consumed per week (For this problem, assume Andrew can only buy apples and oranges in whole units, i.e. use the discrete values given in the table, do not attempt to graph as a linear demand curve):

1. If the market price for apples is \$3, how many apples will Andrew purchase each week and how much will he spend in total on all of the apples that he consumes each week? Briefly explain how you derived your answer.
2. If the market price for oranges is \$4, how many oranges will Andrew purchase each week and how much will he spend in total on all of the oranges that he consumes each week? Briefly explain how you derived your answer.
3. How much consumer surplus does he receive from consuming apples each week? How much consumer surplus does he receive from consuming oranges each week? (Work must be shown in order to receive full credit)
4. How much would Andrew be willing to pay, per week, for the right to purchase oranges at \$1 per orange instead of the current market price of \$4 per orange? Briefly explain your reasoning.

Apr 12 2021 View more View Less