Consumer surplus increases when the market price of a commodity declines.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the highest price that a consumer is willing to pay for a good or service and the actual price that they pay. As the market price of a commodity declines, consumers are able to purchase the product at a lower cost than they originally anticipated, which increases their consumer surplus. Therefore, as the market price decreases, consumer surplus increases.

Consumer Surplus Increases When the Market Price of a Commodity