micro economics question

Question

Suppose there is a decrease in the price of swimsuits and no change in the market demand curve for swimsuits. Who receives the resulting increase in consumer surplus?

a) Buyers who did, and who did not, purchase swimsuits at the original price.

b) Only buyers who purchased swimsuits at the original price.

c) Everyone who bought or sold swimsuits at the original price.

d) Only sellers who sold swimsuits at the original price.

e) Only buyers who did not purchase swimsuits at the original price.

can someone also explain why too? thanks!

Answer 1

If the equilibrium price falls and it was not a result of demand decreasing, then it could have been from an increase in supply or an effective price ceiling. Since the problem is stating that consumer surplus increased, then supply must have increased (an effective price ceiling leads to an indeterminate consumer surplus gain/loss..however a supply increase leads to higher quantity and lower prices which guarantees an increase in consumer surplus).

The individuals who gain more consumer surplus are buyers who are who did not purchase swimsuits at the original price but rather the new lower price...answer E.