Use the following to answer question:
-(Figure: Consumer Surplus I) Look at the figure Consumer Surplus I.If the price falls from P₂ to P₁,consumer surplus increases by the area:

Question

Use the following to answer question:

-(Figure: Consumer Surplus I) Look at the figure Consumer Surplus I.If the price falls from P₂ to P₁,consumer surplus increases by the area:

Quizplus · Accepted Answer

Consumer surplus increases by the area between the initial price level (P₂) and the new lower price level (P₁), above the demand curve and up to the point where the quantity demanded increases due to the price drop. This area is represented by D, which is the area between the two price levels, above the demand curve, and up to the new quantity demanded, encapsulated by the points P₁, P₂, and BF.

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