Refer to the information provided in Figure 4.6 below to answer the question(s) that follow.
Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6
-Refer to Figure 4.6. Consumer surplus changes by the area [E - C] if price goes from equilibrium to

Question

Refer to the information provided in Figure 4.6 below to answer the question(s) that follow.
Equilibrium in this market occurs at the intersection of curves S and D.  Figure 4.6
-Refer to Figure 4.6. Consumer surplus changes by the area [E - C] if price goes from equilibrium to
A) P1. 
B) P3. 
C) < P1. 
D) > P3.

Quizplus · Accepted Answer

Consumer surplus changes by the area [E - C] if the price goes from equilibrium to P1 because consumer surplus is the area between the demand curve and the price level, up to the quantity demanded. Moving from the equilibrium price to P1 would decrease consumer surplus by the area between these two prices, which is represented by [E - C].

Refer to the Information Provided in Figure 4