Consumer Surplus Question

Jeice

Suppose the demand curve for digital picture frames is:
Q [subscript] D = 1400 – 7P

a) Graph the demand curve for digital picture frames and find the quantity sold
when the price is $118.
b) Find the consumer surplus in this market when the price is $118.
c) Suppose the price of digital picture frames goes up by $10. Find the change in
consumer surplus in this market that is due to the price change.


I know how to do a and b, but I don't understand how to do c.

a) The graph has points, (0,200), (574,118) and (1400,0)
b) consumer surplus = 23,534
which is the area of the triangle from the graph in part a. (.5 * bh = .5 * (200-118) * 574)

c) The answer is suppose to be -5,390 but I can't get this answer. Please help.

DJ-99

You just do the same thing that you did before, except the price has changed. Now the price is 128 and the quantity demanded is 504, so the area of the triangle is .5*(200-128)*504 = 18,144. The difference between that and your first answer is 5,390.

Jeice

oooooh! I understand. Damn, I thought by price changing 10 dollars, it meant that the formula would change, like it would be:

QD = 1400 - 17P

Thanks a lot!