Along a given downward-sloping demand curve, an increase in the price of a good will consumer surplus. decrease The answer cannot be determined without information about the supply curve. not change increase

The options for this question are the following:

A) increase

B) decrease

C) not change

D) The answer cannot be determined without information about the supply curve.

The correct answer is decrease.

Explanation:

Consumer surplus is the difference between the total profit we get from a good or service and its market price.

Consumer surplus arises from the law of diminishing returns. This means that the first unit to acquire we value it highly, but as we acquire additional units our valuation is falling.

However, the price we pay for any unit is always the same: the market price. In this way, we enjoy a positive surplus of the first units we acquire until we reach the last one in which the surplus will be zero.

In graphic terms, consumer surplus is measured as the area below the market demand curve and above the price line. The demand curve measures the amount consumers are willing to pay for each unit consumed. Then, the total area below the demand curve reflects the total utility of consumption of the good or service. If the price we pay for each unit is subtracted from this area, the consumer surplus is obtained.

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answer; the correct answer is (direct foreign investment);