Figure 9.6
-Refer to Figure 9.6. As a result of this policy, consumer surplus will
A) fall to $15.
B) fall to $2250.
C) rise to $2500.
D) fall to $5000.
E) rise to $5000.

Question

Figure 9.6
-Refer to Figure 9.6. As a result of this policy, consumer surplus will
A) fall to $15. 
B) fall to $2250. 
C) rise to $2500. 
D) fall to $5000. 
E) rise to $5000.

Quizplus · Accepted Answer

The policy shifts the price from P1 to P2, which reduces consumer surplus from the area above P1 but below the demand curve to the area above P2 but below the demand curve. The reduction in consumer surplus is the shaded triangle above P2, below the demand curve, and to the left of the vertical line at Q2. This area has a height of $750 (the difference between P1 and P2) and a base of 3 units (the difference between Q1 and Q2). Therefore, the reduction in consumer surplus is $2250.

Figure 9.6 -Refer to Figure 9.6. as a Result of This Policy