Assume an individual with a downward- sloping demand curve is paying a single price for each unit of some commodity.He will experience consumer surplus on
A)all units that were not bought at that particular price.
B)none of the units.
C)all of the units bought.
D)the first unit only.
E)all units bought with the possible exception of the last unit.

Question

Quizplus · Accepted Answer

A downward-sloping demand curve means that the consumer is willing to pay higher prices for fewer units and lower prices for more units. Therefore, the consumer will experience consumer surplus on all units purchased at a price lower than their willingness to pay. For the last unit purchased, the consumer's willingness to pay is equal to the price paid, so there is no consumer surplus on that unit. As a result, the consumer will experience consumer surplus on all units bought with the possible exception of the last unit. Choice E is the correct answer.

Assume an Individual with a Downward- Sloping Demand Curve Is