When the Demand for a Good Increases and the Supply

question 44

Multiple Choice

When the demand for a good increases and the supply of the good remains unchanged, consumer surplus

• A)decreases.
• B)is unchanged.
• C)increases.
• D)may increase, decrease, or remain unchanged.

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Definitions:

Differential Revenue

The difference in revenue generated under two different scenarios or as a result of a specific action.

Additional Cost

Expenses incurred that are over and above the originally planned or estimated costs.

Selling Price

The amount at which a product or service is offered to customers for purchase.

Opportunity Cost

The benefit that is missed or given up when choosing one alternative over another.