4. Suppose the graph below represents my demand curve for cups of coffee per wee

Question

4. Suppose the graph below represents my demand curve for cups of coffee per week. 4 0 Quantity of cups of coffee purchased per week (a) Given this graph: If I have consumed one cup of coffee, how much am I willing to pay for an additional cup of coffee? (b) Given this graph: If I have consumed one cup of coffee, how much am I willing to pay for an additional half a cup of coffee? (c) Given the demand curve do I enjoy the sips from the first half of the second cup more, less, or the same as the typical sips from the second cup? (see the previous questions for instructions on how to answer this question if you have forgotten). (d) If the price of a cup of coffee is $1.50, how many cups of coffee will I purchase per week? Page 3

Explanation / Answer

A 3 as shown by demand curve at 2 units

B 3.25 from 1 unit fall in price =2 unit increase in demand. That implies 1/2=0.5 is fall in price per unit increase in quantity. Now when quantity is 1.5 we subtract 1.5(0.5)=0.75 from 4.Tge result is 3.25

C more as demand curve is higher at initial sios and then falls

D 5 as shown by demand curve

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