Answer to Question #90938 in Microeconomics for 1111111

Question #90938
True or False: If the price of haircuts rises from $10 to $11, consumers' surplus will fall by 10%
1
Expert's answer
2019-06-21T09:18:20-0400

Calculation for decrease in consumer’s surplus;

Initial price= $10

Current price after increase: $11

The difference here is ($11-$10) = $1

In terms of percentage you divide the $1 with the initial price($10) and multiply it by 100%

= 1/10 * 100%

=10%

Thus, it is actually true that consumers’ surplus has fallen by 10%.


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