The demand curve for cookies is downward sloping. When the price of cookies is $2, the quantity demanded is 100. If the price rises to $3, what happens to consumer surplus?

The consumer surplus falls by less than $100.

Explanation:

Consumer surplus can be understood as the difference between the consumer is willing to pay for a product and the actual price of the product. When the price of any commodity increases, then the consumer surplus decreases. Here, the price of each cookie is $2 and the quantity demanded is 100. Therefore, the total price that consumer has to pay is $200. When the price increases to $3 and the quantity demanded remains the same, then the total price becomes $300. Therefore, the actual amount that consumer was willing to pay was $200 and the actual price has increased to $300. This has created a decrease in the consumer surplus by $100.