Economics Consumer Surplus And Producer Surplus Questions Medium
The impact of a change in quantity on consumer surplus depends on whether the change is an increase or a decrease in quantity.
If there is an increase in quantity, it generally leads to an increase in consumer surplus. This is because consumers are able to purchase more of a good or service at a lower price, resulting in a greater overall benefit to consumers. As a result, the consumer surplus expands as the additional units of the good or service provide more satisfaction to consumers.
On the other hand, if there is a decrease in quantity, it usually leads to a decrease in consumer surplus. This is because consumers are now able to purchase fewer units of the good or service at a higher price, resulting in a reduced overall benefit to consumers. Consequently, the consumer surplus shrinks as consumers are unable to enjoy the same level of satisfaction they previously had.
In summary, an increase in quantity generally leads to an increase in consumer surplus, while a decrease in quantity usually leads to a decrease in consumer surplus.