Asked by Vaughn Lawrence on Jul 22, 2024
Verified
(Figure: Consumer Surplus I) Look at the figure Consumer Surplus I.If the price rises from P1 to P2,consumer surplus decreases by the area:
A) ABP2.
B) AFP1.
C) BGF.
D) P1P2BF.
Consumer Surplus I
The gap between what consumers are prepared and able to spend on a product or service and what they end up paying.
Price
The amount of money required to purchase a good or service.
- Master the understanding of consumer surplus and its graphical portrayal.
- Calculate the shifts in consumer surplus as a consequence of price changes.
Verified Answer
KJ
kelly JohnsonJul 29, 2024
Final Answer :
D
Explanation :
Consumer surplus is the area between the demand curve and the price level up to the quantity demanded. When the price rises from P1 to P2, the consumer surplus decreases by the area under the demand curve between these two prices, which is represented by the area P1P2BF.
Learning Objectives
- Master the understanding of consumer surplus and its graphical portrayal.
- Calculate the shifts in consumer surplus as a consequence of price changes.
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