As the market price of a good falls due to an increase in supply, what happens to consumer surplus?
A) It rises.
B) It falls.
C) It does not change.
D) It can fall, rise, or stay the same.

Question

Quizplus · Accepted Answer

As the market price of a good falls due to an increase in supply, consumers are able to purchase the good at a lower price than before, increasing their consumer surplus. Therefore, option A is correct.

As the Market Price of a Good Falls Due to an Increase