Figure 7-2
-Refer to Figure 7-2.When the price falls from P1 to P2,which area represents the increase in consumer surplus to existing buyers?

Question

Figure 7-2 
-Refer to Figure 7-2.When the price falls from P1 to P2,which area represents the increase in consumer surplus to existing buyers?

Quizplus · Accepted Answer

Area BCFD represents the increase in consumer surplus to existing buyers. This area consists of the portion above price P2 and below the demand curve (from point B to point C to point F to point D). This represents the extra benefit gained by consumers who were already willing to buy the product at a higher price (P1) but now benefit from the lower price (P2).

Figure 7-2 -Refer to Figure 7-2.When the Price Falls from P1 to from P1