Final answer:
The question asks for the change in consumer surplus when the price drops by 8 percent and the price elasticity of demand is 1. A precise calculation of the change in consumer surplus cannot be determined without the new quantity demanded at the lower price. Generally, with unit elastic demand (elasticity = 1), the percentage change in quantity demanded would match the percentage change in price.
Step-by-step explanation:
The student's question relates to the impact of a price change on consumer surplus when the price elasticity of demand for a good is unit elastic, or equal to 1. In the scenario given, the current price for a good is $25 with 90 units demanded. When the price drops to $23, which is an 8 percent decrease, the quantity demanded would proportionally increase by 8 percent, given the price elasticity of demand is 1. However, the question specifically asks for the change in consumer surplus, which would be calculated as the area of a triangle with the base equal to the change in quantity and the height equal to the change in price.
To calculate the exact change in consumer surplus, we would need to know the change in quantity demanded as a result of the price drop, but with a price elasticity of demand of 1, the percentage change in quantity demanded would equal the percentage change in price. Since the question does not provide the new quantity demanded at the lower price, we cannot compute the exact change in consumer surplus.