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Assume an individual's demand curve for gasoline is given by P = 10 - Q, where P is the price of
gasoline ($/gal), and Q is the quantity she consumes (gal/wk). If the individual's weekly income
is $1,000 and the current price of gasoline is $2/gal, by how much will her consumer surplus
decline if an oil import restriction raises the price to $4/gal? Could you draw a diagram as well?

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Assume an individuals demand curve for gasoline is given by P = 10 .pdf

  • 1. Assume an individual's demand curve for gasoline is given by P = 10 - Q, where P is the price of gasoline ($/gal), and Q is the quantity she consumes (gal/wk). If the individual's weekly income is $1,000 and the current price of gasoline is $2/gal, by how much will her consumer surplus decline if an oil import restriction raises the price to $4/gal? Could you draw a diagram as well?