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Other things remaining the same, a rise in the price of a good will cause the consumer surplus to:
Astay the same
Bdecrease
Cincrease
Dbecome infinite
Answer & Solution
Correct answer: B. decrease
1. Consumer surplus is the triangular area below demand and above price.
2. A higher price line shrinks this triangle, so consumer surplus falls.
3. A price fall would raise it, it does not stay fixed, and it does not turn infinite, so those options are wrong.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit II "Theory of Consumer Behaviour", p.10_
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