Consumer surplus is the hypothetical monetary gain of consumers because they are able to buy a product for a price lower than they are originally willing to pay. When demand increases, supply (which is inversely proportional to demand) decreases, and as a result, prices increase. When prices increase, consumer surplus decreases.
it always increases
When the price is above equilibrium, there is a surplus because supply is greater than demand. The price of the good will naturally decrease back to its equilibrium price where demand and suppy interesect, thus eliminating the surplus.
Consumer surplus generated by lower prices can be offset by demand of product. The above answer overlooks the obvious answer, which is that the increase in the price of a product(s ) will decrease consumer surplus. This assumes of course that there is no shift in demand.
What increases, decreases and stays the same during a economic expansion? Choices: tax revinue, consumer income, budget surplus, aggregate demand, budget deficit, aggregate supply, real GDP, corporate profits
Demand also increases.
it always increases
When the price is above equilibrium, there is a surplus because supply is greater than demand. The price of the good will naturally decrease back to its equilibrium price where demand and suppy interesect, thus eliminating the surplus.
Consumer surplus generated by lower prices can be offset by demand of product. The above answer overlooks the obvious answer, which is that the increase in the price of a product(s ) will decrease consumer surplus. This assumes of course that there is no shift in demand.
What increases, decreases and stays the same during a economic expansion? Choices: tax revinue, consumer income, budget surplus, aggregate demand, budget deficit, aggregate supply, real GDP, corporate profits
consumer buying increases demand when the supply begins to drop the demand goes up.
The case study of consumer surplus will help in the management of the amount of products produced and availed in the market. Consumer surplus will often be cause by a higher supply than demand which causes the consumer to pay less for a product.
Demand also increases.
An example: Consumer demand for a certain car is below the number of cars that are produced. There is an unsold surplus of the vehicles.
An example: Consumer demand for a certain car is below the number of cars that are produced. There is an unsold surplus of the vehicles.
consumer demand for a certain car is below the number of cars that are produced
Surplus means there will be excess supply, meaning demand will fall, and so will prices
Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay (i.e. the market price for the product). The level of consumer surplus is shown by the area under the demand curve and above the ruling market price as illustrated in the diagram below: