Answer:
Option (c) is correct.
Explanation:
Given that,
For 1 pound of ribeye steak,
Alex is willing to pay = $10
Bella is willing to pay = $8
Consumer surplus refers to the benefit that is obtained by the consumer. It is the difference between consumer's willingness to pay for the good and the actual amount paid for the product.
When the price of ribeye steak increases from $9 to $11,
Consumer surplus at price = $9,
For Alex = Willingness to pay - Actual Amount paid for the product
= $10 - $9
= $1
For Bella = $8 - $9
= -$1
Consumer surplus at price = $11,
For Alex = Willingness to pay - Actual Amount paid for the product
= $10 - $11
= -$1
For Bella = $8 - $11
= -$3
Therefore, we can conclude that the consumer surplus of both Bella and Alex decreases, due to an increase in the price of the product.
