Question

Suppose there is an increase in supply that reduces market price. Consumer surplus increases because (1) consumer surplus received by existing buyers increases and (2) new buyers enter the market. a. TRUE b. FALSE

Answer 1

True

Step-by-step explanation:

If there is an increase in supply that reduces market price. Consumer surplus increases because both of the following reasons

(1) consumer surplus received by existing buyers increases and

(2) new buyers enter the market.

a. TRUE