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)all of the units bought.
C)all units bought with the possible exception of the last unit.
D)the first unit only.
E)none of the units.

Question

Quizplus · Accepted Answer

A downward-sloping demand curve implies that the consumer is willing to pay a higher price for the first unit of the commodity compared to the last unit. Therefore, the consumer surplus will be highest for the first unit and decrease for subsequent units purchased at the same price. The consumer will not experience any surplus for the last unit purchased since the price paid for the last unit will be equal to the consumer's maximum willingness to pay for that unit. Thus, the correct answer is C, which suggests that the consumer will experience consumer surplus on all units bought with the possible exception of the last unit.

Assume an Individual with a Downward-Sloping Demand Curve Is Paying