If the price of a good increases, what happens to consumer surplus? Why? If the price...

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If the price of a good increases, what happens to consumer surplus? Why? If the price...

If the price of a good increases, what happens to consumer surplus? Why? If the price of a good decreases, what happens to consumer surplus? Why? Explain a recent situation in which you purchases a good for more or less than anticipated and what happened to your consumer surplus.

business economics

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Answer 1

Answer #1

The consumer surplus is a difference between what the consumer is actually paying and the anticipated price or the price which the consumer will pay for the last good in the market.

IF the price of the good increase the consumer surplus in the market decease as the consumers have to pay more for the same good. IF the price of the good decrease the consumer surplus in the market increase as the difference between the anticipated price and actual price increase.

Recently, I brought a cake. The anticipated price for the cake was more than what I actually got to pay. That difference between the two increased the surplus I got in market. It was a sale time.

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Answer 2

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If the price of a good increases, what happens to consumer surplus? Why? If the price...

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