Suppose that a consumer is consuming 10 units of a discrete...

Suppose that a consumer is consuming 10 units of a discrete good and the price increases from $\$ 5$ per unit to $\$ 6 .$ However, after the price change the consumer continues to consume 10 units of the discrete good. What is the loss in the consumer's surplus from this price change?

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Key Concepts

Discrete Goods in Consumer Theory

When dealing with discrete goods, the analysis of consumer surplus involves adding up the surplus for each individual unit consumed rather than integrating over a continuous range. This is important because the benefit per unit can be distinctly calculated, and price changes directly impact the surplus on a per-unit basis.

Price Change Impact on Consumer Surplus

A change in price alters the consumer surplus by changing the net benefit consumers get from each unit. When the price increases, the surplus per unit decreases, and if consumption remains constant, the total loss in consumer surplus is proportional to the increase in price multiplied by the number of units purchased.

Consumer Surplus

Consumer surplus is the economic benefit that consumers receive when they pay a price for a good that is less than the maximum amount they are willing to pay. It represents the difference between the total value consumers place on a quantity of goods and the total amount they actually pay.

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