Figure 7-6

-Refer to Figure 7-6.If the price decreases from $22 to $16,by how much would consumer surplus increase
A)$120
B)$360
C)$480
D)$600

Question

Figure 7-6
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-Refer to Figure 7-6.If the price decreases from $22 to $16,by how much would consumer surplus increase
A)$120 
B)$360 
C)$480 
D)$600

Quizplus · Accepted Answer

Consumer surplus is the difference between the price consumers are willing to pay for a good and the price they actually pay. In this case, the price decreases from $22 to $16, so consumer surplus increases by the difference between these two prices, which is $6. Since there are 80 units of the good being consumed, the total increase in consumer surplus is $6 x 80 = $480.

Figure 7-6 ​

Figure 7-6