Goods that are valuable will have a ________ consumer surplus because ________ units of the good are consumed at a ________ price.
A) large; more; lower
B) large; less; higher
C) smaller; more; lower
D) smaller; fewer; lower
E) larger; fewer; lower

Question

Quizplus · Accepted Answer

When goods are valuable, consumers are willing to pay a higher price for them. This means that at a lower price (which is still above the cost of producing the good), consumers will demand more units of the good. Therefore, the consumer surplus (the difference between the price paid and the amount consumers are willing to pay) will be larger. This is reflected in the answer choice A, where a larger consumer surplus is associated with more units of the good being consumed at a lower price.

Goods That Are Valuable Will Have a ________ Consumer Surplus