An increase in the price of a good along a stationary demand curve ?
Correct answer: B. decrease consumer surplus
- A. improves the material welfare of the buyers.
- B. decrease consumer surplus
- C. improves market efficiency.
- D. increase consumer surplus.
Explanation
A higher price reduces the surplus buyers receive because they pay more while their willingness to pay remains unchanged along the stationary demand curve. Therefore, consumer surplus decreases.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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