Figure 3-18 -Refer to Figure 3-18. When the Price Falls from P₁

question 123

Multiple Choice

Figure 3-18
-Refer to Figure 3-18. When the price falls from P₁ to P₂, which area represents the increase in consumer surplus to new buyers entering the market?

• A) ABD
• B) ACF
• C) BCDE
• D) DEF

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Definitions:

Consumers Gain

The benefit or surplus that consumers receive from purchasing goods and services at a price lower than their maximum willingness to pay.

Own Price Elasticity

The responsiveness of the quantity demanded of a good to a change in its own price.

Rent Controls

Government-imposed limits on the amount landlords can charge for leasing property, aimed at making housing more affordable for renters.

Rental Homes

Properties that owners lease to tenants for a predetermined rent and period.