Homework # 1 Week 1 Due Thursday 7 Oct

A Simple Demand Curve Suppose that a consumer’s demand is given by Quantity Demanded (Qd) = 110 – 1*Price Compute and graph the demand curve for prices from 0 to 100 [P{0:110}] in 10 increments If a supplier can only charge the same (1) price for all units sold, what is the total revenue (P* Qd) at each price,{0:110}) At P = 50 What is the consumer’s quantity demanded, how much (in total) did he/she have to pay for it? How much would the consumer have paid if the supplier could have charged different prices equal to the consumer’s maximum willingness-to-pay for each block of 10 units (e.g., 10, 20, 30, 40, 50) up to 50 units? Graphically show a) what the consumer did pay and b) what they would have been willing to pay What is the slope of this demand curve? What is the economic interpretation of the slope?

Hints See slide 12 in lecture_01.2b