The effect of price change on consumer surplus and related concepts.
Understand the Problem
The question appears to be asking for information related to consumer surplus, particularly in the context of price changes and their effect on consumer surplus. It may involve understanding graphs and economic principles around demand and consumer behavior.
Answer
Consumer surplus increases as price decreases.
When the price falls, consumer surplus increases, benefiting more buyers and existing consumers pay lower prices.
Answer for screen readers
When the price falls, consumer surplus increases, benefiting more buyers and existing consumers pay lower prices.
More Information
Consumer surplus represents the area under the demand curve and above the price level. A drop in price results in a larger area, representing the extra benefit to consumers.
Tips
Avoid assuming consumer surplus changes without considering the demand curve's shape.
Sources
- Consumer Surplus - Definition, How to Calculate, Elasticity of Demand - corporatefinanceinstitute.com
- Impacts of Price Changes on Consumer Surplus - ftp.worldpossible.org
- Economic surplus - Wikipedia - en.wikipedia.org
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