Along a straight line demand curve, a decrease in the market price of a good:
A)will cause no change in the value of consumer surplus.
B)will result in an increase in the value of consumer surplus.
C)will result in a decrease in the value of consumer surplus.
D)may lead to a decrease or increase in the value of consumer surplus.

Question

Quizplus · Accepted Answer

Along a straight line demand curve, a decrease in the market price of a good will lead to an increase in the quantity demanded. This increase in quantity demanded will result in a larger consumer surplus for those who were willing to pay the higher price but are now able to purchase the good at a lower price. Therefore, a decrease in market price of a good will result in an increase in the value of consumer surplus.

Along a Straight Line Demand Curve, a Decrease in the Market