The demand curve for cookies is downward-sloping. When the price of cookies is $3, the quantity demanded is 100. If the price rises to $4, what happens to the consumer surplus?

Fall by less than $100.

Explanation:

Given that,

Demand curve for cookies is downward sloping which means that there is a negative relationship between the price of the cookies and the quantity demanded for cookies.

Consumer surplus is the difference of the consumer's willingness to pay and the actual price paid for the good.

If there is a rise in the price of cookies that is paid by the consumer then this will lead to a fall in consumer surplus.

Therefore,

When price = $3 then the quantity demanded = 100

If price rises to $4, then consumer would loose:

= $4 - $3

= $1 on the quantity demanded.

Therefore, this will surely reduce the consumer surplus by less than:

= $1 * 100

= $100