Dawn's bridal boutique is having a sale on evening dresses. The increase in consumer surplus comes from the benefit of the lower prices to
the customers who purchase the evening dresses. Consumer surplus is the difference between the price that the consumers are willing to pay for a good or service and the actual price they pay.
In this case, the lower prices during the sale provide a greater benefit to the customers. They can now purchase the evening dresses at a lower price than they were initially willing to pay. This results in an increase in consumer surplus as the customers gain additional value or benefit from the lower prices.
The increase in consumer surplus can have various effects. It may attract more customers to Dawn's bridal boutique, encourage existing customers to make additional purchases, or even allow some customers to purchase higher-quality dresses or accessories with the money they save from the sale. Overall, the benefit of lower prices leads to a greater consumer surplus and a more positive shopping experience for the customers.
the customers. Consumer surplus refers to the difference between the price that consumers are willing to pay for a product and the actual price they pay. In the case of the sale on evening dresses at Dawn's bridal boutique, the benefit of the lower prices directly contributes to an increase in consumer surplus.
When the prices of the evening dresses are lowered during the sale, it allows customers to purchase the dresses at a lower cost than they would have otherwise. This lower price increases the value and benefit that customers receive from the purchase, as they can now save money or even afford to buy more dresses than they initially planned.
The increase in consumer surplus is derived from the additional satisfaction and value that customers gain from paying a lower price for the evening dresses. The difference between the maximum price they were willing to pay (which may have been higher) and the actual lower sale price they pay contributes to their consumer surplus.
In summary, the increase in consumer surplus during the sale on evening dresses at Dawn's bridal boutique arises from the benefit of the lower prices to the customers, allowing them to obtain greater value and satisfaction from their purchases.
The increase in consumer surplus from the benefit of lower prices can be calculated by comparing the original price of the evening dresses to the sale price. Consumer surplus is the difference between what a consumer is willing to pay for a product and the actual price they pay.
To calculate the increase in consumer surplus, you need the following information:
1. Original price of the evening dress: Let's assume it is $200.
2. Sale price of the evening dress: Let's assume it is $150.
Now, to calculate the increase in consumer surplus:
1. Subtract the sale price from the original price: $200 - $150 = $50.
2. Divide this difference by 2: $50 / 2 = $25.
The increase in consumer surplus is $25, which represents the additional benefit consumers receive from the lower price. This means that consumers are able to save $25 per dress compared to the original price.
Consumer surplus is a measure of the economic welfare that consumers gain from purchasing a product at a lower price than their willingness to pay. In this case, consumers are benefiting from the sale by saving money and receiving more value from their purchase.