Math Problem Statement
The rightward shift of the supply curve will cause consumer surplus to increase from area _____ to area _____.
Solution
To analyze the change in consumer surplus due to the rightward shift of the supply curve, let's break down the components in the graph:
-
Consumer Surplus Definition: Consumer surplus is the area between the demand curve and the price level, up to the equilibrium quantity.
-
Initial and New Supply Curves:
- The initial supply curve is .
- The supply curve shifts to the right to , resulting in a lower equilibrium price and a higher equilibrium quantity.
-
Equilibrium Points:
- Before the shift, the equilibrium point is where intersects , at point C (price approximately $30).
- After the shift, the new equilibrium is where intersects , at point D (price approximately $20).
-
Consumer Surplus Areas:
- Initial Consumer Surplus: Before the shift, consumer surplus is the area ABC.
- New Consumer Surplus: After the shift, consumer surplus expands to the area ABCD.
Answer:
The rightward shift of the supply curve will cause consumer surplus to increase from area ABC to area ABCD.
Would you like a more detailed explanation or have further questions?
Related Questions:
- What happens to producer surplus when the supply curve shifts to the right?
- How would a leftward shift of the supply curve affect consumer surplus?
- What factors might cause a supply curve to shift to the right?
- How can changes in consumer and producer surplus illustrate economic efficiency?
- Why does consumer surplus increase when equilibrium price decreases?
Tip:
In economic graphs, consumer surplus is often represented as the area above the price level and below the demand curve, up to the point of equilibrium.
Ask a new question for Free
By Image
Drop file here or Click Here to upload
Math Problem Analysis
Mathematical Concepts
Economics
Consumer Surplus
Supply and Demand
Formulas
Consumer Surplus = Area between Demand Curve and Price Level
Theorems
Consumer Surplus and Equilibrium Price Relationship
Suitable Grade Level
Grades 11-12
Related Recommendation
Consumer Surplus in Supply and Demand Graph at Equilibrium Price
Shift in Supply Curve and Total Surplus: Analyzing Changes in Equilibrium
Effect of Tax on Consumer Surplus with Supply and Demand Curves
Consumer Surplus and Demand Curve Analysis
Consumer and Producer Surplus at Market Equilibrium Price and Quantity