Suppose an individual’s demand for a good is described by the demand function P=80-4Q. If a change in market supply results in price decreasing from P0 = $60 to P1=$40, then the change in consumer surplus is:

To determine the change in consumer surplus resulting from a shift in price, first, we need to understand how to find consumer surplus using the demand function provided, which is P = 80 - 4Q.

The consumer surplus is represented by the area under the demand curve and above the price level up to the quantity consumed. To find consumer surplus, we first need to identify the quantities consumed at the initial price ( P_0 ) of $60 and the new price ( P_1 ) of $40.

1. Find the initial quantity consumed (Q0) at ( P_0 = 60 ): [ 60 = 80 - 4Q \ 4Q = 20 \ Q_0 = 5 ]

2. Now find the new quantity consumed (Q1) at ( P_1 = 40 ): [ 40 = 80 - 4Q \ 4Q = 40 \ Q_1 = 10 ]

3. Calculate the consumer surplus at ( P_0 ): Consumer surplus is calculated as the area of the triangle formed under the demand