-The Figure Above Shows Cindy's Demand for CDs Per Year

question 336

Essay

-The figure above shows Cindy's demand for CDs per year.
a.What is Cindy's consumer surplus on all the CDs consumed if the price of a CD is $12?
b.What is Cindy's consumer surplus on all the CDs consumed if the price of a CD is $9?
c.What happens to Cindy's consumer surplus when the price of a CD falls?

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Definitions:

Average Rate of Return

The ratio of the average annual profit to the initial investment, expressed as a percentage, used to assess the profitability of an investment.

Estimated Annual Net Income

The projection of a company's net income over the course of a future year, based on current trends and expectations.

Straight-Line Depreciation

A way of allocating the expenditure of a physical asset in uniform annual installments over its lifespan.

Average Rate of Return

A financial ratio that shows the average annual return on an investment, expressed as a percentage of the initial investment cost.