if-the-world-price-of-a-good-is-4-and-the-domestic-price-was-7-how-does-consumer

Question

If the world price of a good is $$4 and the domestic price was 7$$, 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 remains unchanged as the price change does not affect surplus.

Answer

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

Answer

Consumer surplus decreases due to increased competition.

If the world price of a good is \$4 and the domestic price was \$7, how does consumer surplus change when the world price is adopted?