Sandyʹs current consumer surplus for candy is 20. Candy is a normal good for her. When...
Sandyʹs current consumer surplus for candy is 20. Candy is a normal good for her. When her income increases and the price of candy remains unchanged, her consumer surplus will
A) increase.
B) decrease.
C) remain the same.
D) Not enough information.
Homework Answers
Answer
Option A
increase
the increase in the income increases demand for the good which increases both price and quantity in the new equilibrium but as per the given information, the price is unchanged then consumer surplus increases as the quantity increases and also the willingness to pay also increases.
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