What affect does increasing demand have on price levels and consumer surplus?

By increasing demand levels, which often happens through a growing market and more buyer interest, you would experience a shift in the demand curve the right. This shift, whether in micro or macro economics, would decrease the price of the product or price levels within the economy, whilst when dealing with microeconomics, increasing the consumer surplus as the area between the demand curve, y-intercept and the market clearing price is increased.

You must be aware the effect the elasticity of the supply curve will have on the change in price as the more elastic the supply curve is, the larger the change in price will be. And also remember that consumer surplus is a microeconomic phenomenon, so isn't relevant when being asked a question about microeconomics, don't include consumer surplus in your answer.

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Answered by Daisy E. Economics tutor

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