All else equal, what happens to consumer surplus if the price of a good increase

Question

All else equal, what happens to consumer surplus if the price of a good increases? Consumer surplus increases Consumer surplus decreases Consumer surplus is unchanged Consumer surplus may increase, decrease, or remain unchanged Producer surplus is measured using the demand curve for a good always a negative number for sellers in a competitive market the amount a seller is paid minus the cost of production the opportunity cost of production minus the cost of producing goods that go unsold Suppose the demand for peanuts increases What will happen to producer surplus in the market for peanuts? It increases It decreases It remains unchanged It may increase decrease or remain unchanged Total surplus Is represented by the area below the demand curve and above the price and up to the point of equilibrium demand curve and above the supply curve up to the equilibrium quantity. demand curve and above the horizontal axis up to the equilibrium quantity.

Explanation / Answer

Question 26)

D

Consumer surplus sometimes increases when price of good increases, but later on when it is above equilibrium it will start to decrease. The potential benefits of lower price is taken into account, If price is too high then consumer surplus will bein to decrease

Question 27)

C

The amount that sellers makes by selling good to consumer

Question 28)

A

If demand increases for peanuts then producer surplus also increases

Question 29)

D

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