Asked by Vasilis Lymberis on Jun 18, 2024
Verified
All else equal, an increase in supply will cause an increase in consumer surplus.
Consumer Surplus
The contrast between the overall amount consumers are willing to pay for a good or service and the total they actually pay.
Supply
The total amount of a good or service that producers are willing and able to sell at a given price over a certain period.
- Acknowledge the results of variations in market supply and demand on consumer surplus.
- Master the subject and appraisal of consumer surplus.
Verified Answer
SG
Shelby’s Glam TutorialsJun 23, 2024
Final Answer :
True
Explanation :
When supply increases, the price of the good typically decreases because there is more of the good available. This decrease in price allows consumers to purchase the good at a lower price, increasing the consumer surplus, which is the difference between what consumers are willing to pay and what they actually pay.
Learning Objectives
- Acknowledge the results of variations in market supply and demand on consumer surplus.
- Master the subject and appraisal of consumer surplus.