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Calculate the consumers surplus based on the Marginal utility table?
4.Calculate the consumers surplus based on the Marginal utility table given below, where the cost of each commodity is Rs.10/- and draw diagram.
No. of unitsMUPrice (Rs)Consumer’s surplus
110010
28010
36010
44010
52010
610 10
CS = (100-10) + (80-10) + (60-10) + (40-10) + (20-10) = $250
Note the consumer's MU curve is also his demand curve.
I suspect you meant the last row to be 6, 0, 10
The (inverse) demand curve is : p = 120 - 20q
http://www.wolframalpha.com/input/?i=Plot[120%20-%2020x%2C%20{x%2C0%2C6}&t=ff3tb01
Note that the graph shown should actually be a bar chart instead of a line graph shown, as the commodity is sold in discrete units.
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