Purchase Solution

Market demand and consumer surplus, shifting versus movement

Not what you're looking for?

Ask Custom Question

Could you please help with these problems involving the market demand curve.

1. The market demand curve for a product always slopes downward to the right. Yes or no? Explain.

2. Is there a difference between a movement along a demand curve and the shift of the demand curve? Yes or no? Explain.

3. Why are managers interested in the concept of consumer surplus? Discuss.

Purchase this Solution
Solution Summary

This 299 word solution is a discussion of the market demand curve, shifting versus movement, and consumer surplus. It explains the correct directional slope of demand curves and why that direction is always correct. It explains the difference between movement along a demand curve and the shift of a demand curve.

Solution Preview

1. Yes, the market demand curve always slopes downward to the right, due to the law of demand. This is because as the price increases, the quantity sold decreases. Similarly, as the price decreases, the quantity sold increases. Since a high value of one variable results in a low value of the other variable, the curve slopes downward from left to right.

2. Yes, there is a difference between a movement along a ...

Solution provided by:
J Pye, MSc
Education
  • MSc, California State Polytechnic University, Pomona
  • MBA, University of California, Riverside
  • BSc, California State Polytechnic University, Pomona
  • BSc, California State Polytechnic University, Pomona
Recent Feedback
  • "Excellent work. Well explained."
  • "Can you kindly take a look at 647530 and 647531. Thanks"
  • "Thank you so very much. This is very well done and presented. I certainly appreciate your hard work. I am a novice at statistics and it is nice to know there are those out there who really do understand. Thanks again for an excellent posting. SPJ"
  • "GREAT JOB!!!"
  • "Hello, thank you for your answer for my probability question. However, I think you interpreted the second and third question differently than was meant, as the assumption still stands that a person still independently ranks the n options first. The probability I am after is the probability that this independently determined ranking then is equal to one of the p fixed rankings. Similarly for the third question, where the x people choose their ranking independently, and then I want the probability that for x people this is equal to one particular ranking. I was wondering if you could help me with this. "
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Operations Management

This quiz tests a student's knowledge about Operations Management

Basics of corporate finance

These questions will test you on your knowledge of finance.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

View More Free Quizzes
Related BrainMass Solutions

  • Plots and multiple choice

    What will be the effect on the demand curve, and what will happen to market equilibrium price and quantity in the short run if, Consumer incomes fall, and the good is normal.

  • Supply and Demand Simulation

    The rental rate decreases, the quantity supplied also decreases, and there is a downward movement along the supply curve. There is no shortage or surplus in the market with the rental rate of $1,300 and leasing 2,250 apartments.  

  • Calculate the change in consumer surplus

    39869 Calculate the change in consumer surplus Rice is traded in a competitive world market. At the world price of $0.10 per pound, unlimited amounts of rice can be imported into Japan for purchase in the Japanese rice market. (e.g.

  • Consumer surplus, marginal utility, and market demand

    348251 Consumer surplus, marginal utility, and market demand Define consumer surplus. Explain relationship between consumer surplus, marginal utility, and market demand.

  • Calculating equilibrium price and consumer surplus

    377145 Equilibrium price and consumer surplus 1) In a competitive market, the market demand is Qd=48 - 5p and the market supply is Qs = 7P.

  • Determining consumer surplus

    The level of consumer surplus is shown by the area under the demand curve and above the ruling market price. Given example is a case of perfectly inelastic demand i.e. demand is totally invariant to a price change.

  • Equilibrium price & quantity and total consumer surplus

    In the second, the market supply is given by P = Q and in the third, the market supply is given by Q = 50 For each scenario, calculate the equilibrium price and quantity, the total consumer surplus, and the total producer surplus.

  • consumer surplus of the "last person"

    His consumer surplus is the difference between the highest price and the market price. The "last person" is the one who is only willing to pay the market price. He therefore has a consumer surplus of zero.

  • Calculating consumer and producer surplus

    What is the equilibrium price and quantity? b. Draw the demand and supply curves. If this represents perfect competition, are the curves individual firm or market curves? How is the quantity supplied derived? c. Show the consumer surplus.

View More Related Solutions