When demand for a product falls, ceteris paribus, what happens to equilibrium price and consumer surplus at that price?

Question

Quizplus · Accepted Answer

When demand for a product falls, ceteris paribus, the equilibrium price decreases because suppliers are willing to accept lower prices to sell their products. Consumer surplus falls because there are fewer transactions happening at the lower price, and consumers value the last units purchased less than the units they would have purchased at a higher demand level.

When Demand for a Product Falls, Ceteris Paribus, What Happens