Final answer:
An increase in price from $14 to $16, using the demand equation Price = 20 - 2Q, results in a decrease in consumer surplus because consumers are paying more and potentially buying less, leading to a lower area under the demand curve above the new price.
Step-by-step explanation:
When the price of golf balls increases from $14 to $16, assuming the demand equation is Price = 20 - 2Q, where Q is the quantity demanded, we can discern the effect on the consumer surplus. The consumer surplus is the difference between what consumers are willing to pay and what they actually pay, represented graphically by the area under the demand curve and above the price. When the price increases, there is a reduction in the consumer surplus because consumers are now paying more for each unit and may reduce their overall consumption due to the higher price.
For example, using the demand equation, if we initially plug in $14 for the price, the quantity demanded Q would be 3 (since 20 - 14 = 2Q, 6 = 2Q, Q = 3). When the price rises to $16, then Q would be 2 (since 20 - 16 = 2Q, 4 = 2Q, Q = 2). The consumer surplus is reduced, as the price increase leads to a lower quantity being demanded and a higher price being paid for those quantities, reducing the area under the demand curve but above the price.