Quasimodo from your workbook has the utility function U(x, m)= 100x - x²/2 + m, where x is his consumption of earplugs and m is money left over to spend on other stuff.If he has $10,000 to spend on earplugs and other stuff and if the price of earplugs rises from $50 to $75, then his net consumer's surplus A)falls by 937.50. B)increases by 468.75. C)falls by 2,937.50. D)falls by 625. E)increases by 1,875.

Question

Quizplus · Accepted Answer

The net consumer's surplus falls by 937.50 because the increase in the price of earplugs reduces the consumer surplus, calculated as the change in the area under the demand curve minus the expenditure.

Quasimodo from Your Workbook Has the Utility Function U(x, M)=