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The current price for a good is ​$​, and units are demanded at that price. The price elasticity of demand for the good is . When the price of the good drops by percent to ​$​, consumer surplus _______
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26 votes
26 votes
The current price for a good is ​$​, and units are demanded at that price. The price elasticity of demand for the good is . When the price of the good drops by percent to ​$​, consumer surplus _______ increases decreases by ​$ nothing. ​(Enter your response to the nearest​ penny.)

User Jon Turner
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1 Answer

17 votes
17 votes

Answer:

Consumer surplus decreases by $180.

Step-by-step explanation:

Current consumer surplus = $25 * 90 unit = $2250

If the price of goods drop to $23 then the new consumer surplus will be

$23 * 90 units = $2070

The change in consumer surplus is $180 .

User Ndech
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