The Following Table Shows the Relationship Between Price and Demand

question 157

Essay

The following table shows the relationship between price and demand for milk produced in a large dairy. $$\begin{array} { | l | c | c | c | c | c | c | c | } \hline q \text { (billions of pounds of milk per year) } & 45 & 50 & 55 & 60 & 65 & 70 & 75 \\\hline p \text { (price in dollars per pound) } & 1.00 & 0.90 & 0.80 & 0.70 & 0.60 & 0.50 & 0.40 \\\hline\end{array}$$
Determine the consumer's surplus when the sales quality is 65 billion pounds of milk in a year. Illustrate your answer by drawing the corresponding demand curve and the identifying the consumer's surplus as a region.

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Definitions:

Cash Fund

A cash fund is a reserve of liquid money that a business or individual keeps on hand for meeting short-term obligations or emergencies.

Depreciated

Depreciation is the process of allocating the cost of a tangible asset over its useful life, reflecting the asset's wear and tear, deterioration, or obsolescence.

Operating Lease

A contract that allows for the use of an asset but does not convey rights of ownership of the asset, with payments made over a shorter period than the asset's useful life.

Lease Obligation

A financial commitment that represents the future payments an entity is obligated to make under lease agreements.