-The figure illustrates the market for bagels. Initially the market is in equilibrium, Then the number of bagels produced is cut from 20 to 10 an hour and the price rises to $2.00 per bagel. Consumer surplus decreases by
A) $5.00 an hour.
B) $2.50 an hour.
C) $7.50 an hour.
D) $0.50 a bagel.

Question

-The figure illustrates the market for bagels. Initially the market is in equilibrium, Then the number of bagels produced is cut from 20 to 10 an hour and the price rises to $2.00 per bagel. Consumer surplus decreases by
A) $5.00 an hour. 
B) $2.50 an hour. 
C) $7.50 an hour. 
D) $0.50 a bagel.

Quizplus · Accepted Answer

When the quantity of bagels produced decreases from 20 to 10, the price increases to $2.00, reducing consumer surplus. The decrease in consumer surplus is calculated by the change in price multiplied by the change in quantity, which results in a decrease of $7.50 an hour.

-The Figure Illustrates the Market for Bagels