The graph below represents the market for funky fresh rhymes. At a price of $3,000 per funky fresh rhyme, what is the consumer surplus? Alright. Cool. So, what do we have here? They're asking us for consumer surplus, right? We've got a bunch of quantities on the graph, a bunch of prices, we've got our curves there, right? They're asking us about consumer surplus and remember, that's the area below the demand curve and above the market price, right? We're going to get a triangle out of that, and it's going to be this area right here. I'm going to highlight it in green.

So, our market price, what was it? $3,000 and that's right here. So, we want to get the area above the market price but below the demand curve. Right? This is our downward demand. Right? The double d. Downward demand right here. Let's go ahead and highlight that area. So, it's all of this green area right here, right? Below the demand curve, above the market price.

So how do we calculate that? Well, it is a triangle as you can see. Right? So we've got the area of a triangle is going to be half times the base times the height. Right? So, let's go ahead and find out what our base and our height are. So, base and height are going to be these two sides here and this side right here, right? That's going to we'll call that our base. Either one can be base, either one can be height, as long as you pick them.

Alright. So, what's going to be our base, right? Our base is going to be this length between the 3,000 and the 7,000. So, it's going to be half times our base is the difference between the 7,000 and the 3,000, right? It's going to be that 4,000 difference, but I'm going to write it out here. b = 7000 - 3000

What is the length of the height here? What do you see here? We've got a bunch of numbers. Well, it's actually going to be that quantity demanded at that price of 3,000. The quantity demanded is 7.50, and that represents this length, right, from 0 to 7.50 times 750 in that case, right. There's no subtraction needed there because we're going all the way from 0.

So that's pretty much the bulk of it. Let's do this math and figure out what the answer is. C S = 1 2 × 4000 × 750

4000 times 750 equals 3,000,000 and half of that is 1 and a half million, right, and that's going to be the area of that triangle which is our consumer surplus.

So, our answer here at a price of $3,000 per funky fresh rhyme, what is the consumer surplus? It is going to be $1,500,000.

Alright, let's go ahead and move on to the next video.