Asked by Griffin Skubish on May 21, 2024
Verified
Which of the following is true when the price of a good or service falls?
A) Buyers who were already buying the good or service are worse off.
B) More buyers enter the market.
C) The total consumer surplus in the market decreases.
D) The total value of purchases before and after the price change is the same.
Consumer Surplus
The discrepancy between the total price consumers are willing to pay for a service or good versus what they actually spend on it.
- Clarify the influence of market condition variations, like changes in cost or supply movements, on the consumer surplus.
- Acquire insight into the repercussions of complements and substitutes on consumer surplus.
Verified Answer
TK
Tanika KenneyMay 23, 2024
Final Answer :
B
Explanation :
When the price of a good or service falls, it becomes more affordable, attracting more buyers into the market. This is because the lower price makes the good or service accessible to individuals who previously found it too expensive.
Learning Objectives
- Clarify the influence of market condition variations, like changes in cost or supply movements, on the consumer surplus.
- Acquire insight into the repercussions of complements and substitutes on consumer surplus.