Asked by Melissa Wilkerson on Jul 17, 2024
Verified
As a result of a decrease in price,
A) new buyers enter the market, increasing consumer surplus.
B) new buyers enter the market, decreasing consumer surplus.
C) existing buyers exit the market, increasing consumer surplus.
D) existing buyers exit the market, decreasing consumer surplus.
Consumer Surplus
The difference between what consumers are willing to pay for a good or service compared to what they actually pay.
- Describe the impact that modifications in market circumstances, including price adjustments or supply changes, have on consumer surplus.
- Appreciate the influence of complements and substitutes on the surplus of consumers.
Verified Answer
MV
Maxine VincentJul 20, 2024
Final Answer :
A
Explanation :
When the price of a good decreases, it becomes more affordable to a larger group of people. This attracts new buyers to the market, who benefit from the lower price, thus increasing the overall consumer surplus. Consumer surplus is the difference between what consumers are willing to pay and what they actually pay.
Learning Objectives
- Describe the impact that modifications in market circumstances, including price adjustments or supply changes, have on consumer surplus.
- Appreciate the influence of complements and substitutes on the surplus of consumers.