If the price of oak lumber increases,what happens to consumer surplus in the market for oak cabinets?
A)Consumer surplus increases.
B)Consumer surplus decreases.
C)Consumer surplus will not change consumer surplus;only producer surplus changes.
D)Consumer surplus depends on what event led to the increase in the price of oak lumber.

Question

Quizplus · Accepted Answer

An increase in the price of oak lumber will lead to an increase in the cost of production for oak cabinets, causing the supply curve to shift to the left. This will result in a decrease in the equilibrium quantity and an increase in the equilibrium price. As a result, some consumers may no longer be willing or able to afford oak cabinets, and they may shift to other alternatives. This decreases consumer surplus.

If the Price of Oak Lumber Increases,what Happens to Consumer