An increase in price will_________.
- Aincrease consumer surplus
- Bdecrease consumer surplus
- Chave no affect on consumer surplus
- Ddecrease producer surplus
Solution & Step-by-step Explanation
Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay. When the price of an article increases, the gap between the maximum willingness to pay and the actual price paid narrows, which reduces the overall consumer surplus.