146PART THREESUPPLY AND DEMAND II: MARKETS AND WELFAREHOW A LOWER PRICE RAISES CONSUMER SURPLUSBecause buyers always want to pay less for the goods they buy, a lower pricemakes buyers of a good better off. But how much does buyers’ well-being rise inresponse to a lower price? We can use the concept of consumer surplus to answerthis question precisely.Figure 7-3 shows a typical downward-sloping demand curve. Although thisdemand curve appears somewhat different in shape from the steplike demandcurves in our previous two figures, the ideas we have just developed applynonetheless: Consumer surplus is the area above the price and below the demandcurve. In panel (a), consumer surplus at a price of P1is the area of triangle ABC.Quantity(b) Consumer Surplus at Price P2Quantity(a) Consumer Surplus at Price
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