Asked by Harry Nayan on May 11, 2024

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If there is a decrease in demand (parallel shift of demand to the right) ,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

A) will increase.
B) will decrease.
C) will remain the same.
D) may change,but we can't tell how.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits to society from the production and consumption of goods or services.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices over a given period of time.

Positively Sloped

A descriptive term used for a line or curve on a graph that moves upward to the right, indicating a direct relationship between two variables.

  • Understand and appraise the correlation between supply, demand, and aggregate surplus.
  • Evaluate the repercussions of modifications in supply and demand on the total surplus.
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JF
JENNY FUENTESMay 12, 2024
Final Answer :
B
Explanation :
A decrease in demand will lead to a decrease in equilibrium quantity and price. As a result, consumer surplus and producer surplus will both decrease, leading to a decrease in total surplus.