If demand increases when supply is perfectly price elastic, then
A) consumer surplus will remain the same.
B) consumer surplus will increase.
C) it is not possible to predict the change in consumer surplus.
D) consumer surplus will decrease with the increase in price.

Question

Quizplus · Accepted Answer

When supply is perfectly price elastic, the price remains constant as demand increases, leading to an increase in consumer surplus due to the higher quantity consumed at the same price.

If Demand Increases When Supply Is Perfectly Price Elastic, Then