Asked by TEHREEM AHMED on May 04, 2024
Verified
(Figure: Consumer Surplus III) In the figure Consumer Surplus III,when the price falls from $30 to $25,consumer surplus _____ for a total consumer surplus of _____.
A) increases by $25;$74
B) decreases by $15;$34
C) increases by $15;$64
D) increases by $5;$54
Surplus III
An excess of production or supply over demand, often referring to goods in a market that exceed buyer requirements.
- Evaluate the consumer surplus for distinct prices based on a supply and demand chart.
- Assess the impact of price adjustments on consumer surplus.
Verified Answer
AK
Anna Kathryn DavidsonMay 06, 2024
Final Answer :
C
Explanation :
When the price falls from $30 to $25, consumer surplus increases by $15 ($79-$64) for a total consumer surplus of $64+$15=$79. Therefore, the best choice is (C).
Learning Objectives
- Evaluate the consumer surplus for distinct prices based on a supply and demand chart.
- Assess the impact of price adjustments on consumer surplus.
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