Exhibit 5-9 -Refer to Exhibit 5-9. When price falls from P₂ to P₁, the size of consumer surplus A)increases by area 2. B)decreases by area 2. C)remains the same. D)increases by areas 1 + 2. E)decreases by areas 1 + 2.

Question

Quizplus · Accepted Answer

When price falls, consumer surplus increases by the area below the demand curve and above the new price line. In this case, that area is represented by area 2.

Exhibit 5-9 -Refer to Exhibit 5-9. When Price Falls from P2 to from P2

Exhibit 5-9 -Refer to Exhibit 5-9. When Price Falls from P₂ to from P₂