All else constant,as the price elasticity of demand for a good at the equilibrium price decreases,the amount of consumer surplus derived from purchasing the equilibrium quantity of the good increases.

Question

Quizplus · Accepted Answer

When the price elasticity of demand for a good at the equilibrium price decreases, it means that consumers are less responsive to changes in price. This implies that consumers are willing to pay more for the good and that the equilibrium price is lower than what many consumers are willing to pay. Therefore, the amount of consumer surplus derived from purchasing the equilibrium quantity of the good increases as consumers are able to purchase the good at a price lower than what they are willing to pay.

All Else Constant,as the Price Elasticity of Demand for a Good