Consumer Surplus Decreases with Rising Price

Steps:

• Consumer surplus measures the benefit buyers receive, shown as the area below the demand curve and above the price line up to quantity demanded.
• At price P1, initial surplus is the full triangle or area labeled P1Y.
• When price rises to P2, quantity demanded decreases, shrinking surplus to the smaller area P2W.
• The change is a decrease from P1Y to P2W, reflecting lost welfare.

Why B is correct:

• B accurately describes the reduction using the standard graph areas: initial surplus P1Y minus new surplus P2W, per the definition of consumer surplus as integral of demand above price.

Why the others are wrong:

• A: Incorrect formula; P1V - P2W misrepresents the trapezoidal loss area.
• C: Surplus decreases, not increases; XY - WZ wrongly suggests gain.
• D: Surplus falls with higher price, not rises from Y2 to WY.

Final answer: B