Final answer:
When the price of a product increases greatly, the consumer surplus decreases as consumers have to pay more and the gap between their willingness to pay and the actual price narrows.
Step-by-step explanation:
When the price of a product increases greatly, the consumer surplus is generally affected negatively. Consumer surplus represents the difference between the price that consumers are willing to pay for a product and the price they actually pay. As the price increases, the consumer surplus decreases because consumers are paying more for the product, resulting in a smaller difference between their willingness to pay and the actual price.
For example, let's say the original price of a product is $10 and consumers are willing to pay up to $20 for it. This creates a consumer surplus of $10 ($20 - $10). However, if the price of the product increases to $30, the consumer surplus decreases to $0 ($30 - $30), as consumers are now paying the maximum amount they are willing to pay.
In summary, when the price of a product increases greatly, the consumer surplus decreases as consumers have to pay more and the gap between their willingness to pay and the actual price narrows.