if-the-world-price-of-a-good-is-5-and-the-domestic-price-was-8-how-does-consumer

Question

If the world price of a good is $$5 and the domestic price was 8$$, how does consumer surplus change when the world price is adopted?

Accepted Answer

Consumer surplus increases as consumers pay $3 less per unit.

Answer

Consumer surplus decreases due to increased competition.

Answer

Consumer surplus decreases as consumers pay $3 more per unit.

Answer

Consumer surplus remains unchanged as the price change does not affect surplus.

If the world price of a good is \$5 and the domestic price was \$8, how does consumer surplus change when the world price is adopted?