Asked by Jamie Sulley on Apr 26, 2024
Verified
If somebody is buying 10 units of x and the price of x falls by $4, then that person's net consumer's surplus must increase by at least $40.
Consumer's Surplus
The difference between the total amount consumers are willing to pay for a good or service and the total amount they actually pay.
Net Increase
The difference resulting from the amount by which something grows or goes up less any decreases.
Units of X
A measure or quantity of a specific good or product, referred to as 'X' in an economic or mathematical context.
- Gain insight into the notion of consumer surplus and the influence of price and income changes on it.
Verified Answer
SA
Shaleigha AubreyApr 30, 2024
Final Answer :
False
Explanation :
Consumer surplus increases when the price of a good falls, but the increase in consumer surplus is not solely determined by the quantity bought multiplied by the price decrease. It also depends on the individual's demand curve for the product.
Learning Objectives
- Gain insight into the notion of consumer surplus and the influence of price and income changes on it.