Use the following table to work Problems 3 to 5. The table gives the demand schedules for train travel for the only buyers in the market, Ann, Beth, and Cy.
|
Price
|
Ann
|
Beth
|
Cy
|
|
| |
(dollars per
|
30
|
25
|
20
|
|
| |
mile)
|
25
|
20
|
15
|
|
| |
3
|
20
|
15
|
10
|
|
| |
4
|
15
|
10
|
5
|
|
| |
5
|
10
|
5
|
0
|
|
| |
6
|
5
|
0
|
0
|
|
| |
7
|
0
|
0
|
0
|
|
| |
8
|
market demand
|
|
|
| |
9
|
|
|
|
|
| |
|
|
|
|
|
3. a. Construct the market demand schedule.
b. What are the maximum price that Ann, Beth, and Cy are willing to pay to travel 20 miles? Why?
4. a. What is the marginal social benefit when the total distance travelled is 60 miles?
b. What is the marginal private benefit for each person when they travel a total distance of 60 miles and how many miles does each of the people travel?
5. a. What is each traveler's consumer surplus when the price is $4 a mile?
b. What is the market consumer surplus when the price is $4 a mile?