Question

Along a given downward-sloping demand curve, an increase in the price of a good will: have no effect on consumer surplus. increase consumer surplus. decrease producer surplus. decrease consumer surplus.

Answer 1

The answer to this question is the last item in the choices which is "decrease consumer surplus". Thus, we have it like along a given downward-sloping demand curve, an increase in the price of a good will also result to decrease consumer surplus. Also, when decrease consumer surplus is happening it will effect also to increase producer surplus.