Economics Consumer Surplus And Producer Surplus Questions
The relationship between consumer surplus and price is inverse. As the price of a good or service decreases, consumer surplus increases. Conversely, as the price increases, consumer surplus decreases. This is because consumer surplus represents the difference between the maximum price a consumer is willing to pay for a good or service and the actual price they pay. When the price is lower than the maximum price a consumer is willing to pay, they experience a higher consumer surplus.