I understand the effect that a change in price has on the consumer surplus but i have a 4 mark question asking to 'explain the impact of a fall in demand on consumer surplus ceteris parabus'. What would be the answer to this to gain 4 marks?
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Just quoting in Danny Dorito so she can move the thread if needed
I understand the effect that a change in price has on the consumer surplus but i have a 4 mark question asking to 'explain the impact of a fall in demand on consumer surplus ceteris parabus'. What would be the answer to this to gain 4 marks?
Fall in demand > movement to left of D curve > new equilibrium @ higher price and lower quantity >consumer surplus is now a smaller triangle.