Catherine's demand for fish takes the conventional form of a downward-sloping demand curve. When the price of fish falls, her consumer surplus
A) increases
B) decreases
C) remains unchanged because the demand curve didn't change
D) remains unchanged because the quantity demanded remains unchanged
E) decreases only if price elasticity of demand is greater than one

Question

Quizplus · Accepted Answer

When the price of fish falls, Catherine's consumer surplus increases because she is able to purchase the same quantity of fish for a lower price or a greater quantity for the same expenditure, thus deriving more utility or satisfaction from her purchase at a lower cost.

Catherine's Demand for Fish Takes the Conventional Form of a Downward-Sloping