Asked by Cassie Trucchio on Jul 12, 2024
Verified
Along a given downward-sloping demand curve,a decrease in the price of a good will _____ consumer surplus.
A) increase
B) decrease
C) have no effect on
D) It's impossible to tell what will happen to consumer surplus.
Consumer Surplus
The difference in consumer's payment expectation versus their actual expenditure on a good or service.
Demand Curve
A graph representing the relationship between the price of a good and the amount consumers are willing and able to purchase at various prices.
- Master the notion of consumer surplus and its response to changes in prices.
- Recognize the factors responsible for changes in consumer surplus.
Verified Answer
NP
Nimali PriyangikaJul 19, 2024
Final Answer :
A
Explanation :
When the price of a good decreases, consumers are able to purchase the same quantity of goods for less money, resulting in an increase in consumer surplus.
Learning Objectives
- Master the notion of consumer surplus and its response to changes in prices.
- Recognize the factors responsible for changes in consumer surplus.
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