price of the good and the quantity demanded. The area below
the demand curve and above the price paid for the good
represents consumer surplus (net
WTP
), the net economic gain
that consumers receive from participating in the market. It is
a dollar value and can be thought of as an aggregation of the
price and quantity within the demand function. Regarding
the demand for Landsat imagery, focusing on US established
users, this user group obtained 1,687,600 scenes from
EROS
in 2011 when it was offered at no cost (Table 4). This repre-
sents one price and quantity point on the demand curve for
Landsat imagery for this particular user group. At a price of
$0
USD
, this is the number of scenes acquired. Assuming the
percentage of US established users who said that they would
purchase a scene at a particular price in the 2012 survey is
representative of the percentage of the total scenes download-
ed at that price (e.g., if 63 percent of users said they would
purchase a scene at a price of $100
USD
, it is assumed that the
quantity of scenes demanded at that price would be equivalent
to 63 percent of 1,687,600), Figure 3 illustrates the demand
curve, also referred to as the marginal social benefit curve, for
Figure 3. Shaded Area of the Conservative Willingness-to-Pay Amount for US Established Users
Figure 4. Demand function for Landsat imagery illustrating changes in consumer surplus (net
wtp
), the transfer to the government, and
economic loss if price increases from $0 USD per scene to $200 USD per scene for US established users.
654
August 2015
PHOTOGRAMMETRIC ENGINEERING & REMOTE SENSING
