] It is a hot day, and Elmo is thirsty. Here is the value of Elmo places on a bottle of water:]Value of first bottle $7Value of second bottle $5Value of third bottle $3Value of fourth bottle $1 From this information, derive Elmo’s demand schedule. Then graph his demand curve for bottled water.If the price of a bottle of water is $4, how many bottles does Elmo buy? How much consumer surplus does Elmo get from his purchases? Show Elmo’s consumer surplus in your graph.If the price falls to $2, how does quantity demanded change? How does Elmo’s consumer surplus change? Show these changes in your graph.

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Answered: From this information, derive Elmo’s…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 3QR

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] It is a hot day, and Elmo is thirsty. Here is the value of Elmo places on a bottle of water:]

Value of first bottle $7

Value of second bottle $5

Value of third bottle $3

Value of fourth bottle $1

From this information, derive Elmo’s demand schedule. Then graph his demand curve for bottled water.
If the price of a bottle of water is $4, how many bottles does Elmo buy? How much consumer surplus does Elmo get from his purchases? Show Elmo’s consumer surplus in your graph.
If the price falls to $2, how does quantity demanded change? How does Elmo’s consumer surplus change? Show these changes in your graph.

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