Other things being equal, if the price of a good rises, the consumer surplus of that good
A)rises.
B)falls.
C)remains the same.
D)rises and then falls.
E)cannot be determined given the available information.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the maximum amount a consumer is willing to pay for a good and the actual price paid. If the price of the good rises, then the consumer has to pay more than before, decreasing the difference between the maximum amount they are willing to pay and the actual price, which ultimately results in a fall in consumer surplus.

Other Things Being Equal, If the Price of a Good