Asked by Elizabeth Ridgeway on Jul 22, 2024
Verified
Along a given downward-sloping demand curve,an increase in the price of a good will _____ consumer surplus.
A) increase
B) decrease
C) not change
D) The answer cannot be determined without information about the supply curve.
Consumer Surplus
The deviation between consumers’ anticipated payment for a product or service and the eventual price paid.
Demand Curve
A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at each price level.
- Examine the impact of price fluctuations on consumer surplus.
- Analyze how variations in the market influence consumer surplus.
Verified Answer
MP
Malibongwe PhungulaJul 23, 2024
Final Answer :
B
Explanation :
An increase in price will result in a decrease in consumer surplus because consumers will pay more for the same quantity of goods, resulting in a smaller area between the new price and demand curve.
Learning Objectives
- Examine the impact of price fluctuations on consumer surplus.
- Analyze how variations in the market influence consumer surplus.