When the Price of a Good Decreases and All Else

question 97

Multiple Choice

When the price of a good decreases and all else is held constant

• A) producer surplus increases.
• B) both consumer surplus and producer surplus decrease.
• C) both consumer surplus and producer surplus increase.
• D) producer surplus decreases.
• E) consumer surplus decreases.

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Definitions:

Habituation

A psychological learning process wherein there is a decrease in response to a stimulus after being repeatedly exposed to it.

Repetitive Stimuli

Stimuli that are presented repeatedly, which can lead to various psychological effects such as habituation or sensitization.

Energy Conservation

The practice of reducing energy consumption through using less of an energy service and efficient energy usage.

Dishabituation

Increase in responsiveness after presentation of a new stimulus.