If Demand for a Product Rises, What Happens to Consumer

question 182

Multiple Choice

If demand for a product rises, what happens to consumer surplus, assuming supply does not change and the market sells at the equilibrium price?

• A) Consumer surplus will be larger after the increase in demand.
• B) Consumer surplus will be smaller after the increase in demand.
• C) Consumer surplus will remain unchanged after the increase in demand.
• D) There is no way to predict whether consumer surplus will change.

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Definitions:

GAAP

The standard set of guidelines for financial accounting that are widely accepted in a specific jurisdiction, known as Generally Accepted Accounting Principles.

Income Statement

A financial document that shows a company's revenue and expenses over a specific period, ending with the net income or loss for that period.

GAAP

Generally Accepted Accounting Principles, a set of rules and standards for financial reporting widely accepted in the accounting profession.

IFRS

Global accounting standards known as International Financial Reporting Standards, designed for the preparation of financial statements.