If the government removed the excise tax on gasoline,assuming that neither demand nor supply is perfectly inelastic,which effect would NOT occur?

Question

Quizplus · Accepted Answer

When the excise tax on gasoline is removed, both consumers and producers benefit. Consumers benefit from lower prices and increased consumer surplus, while producers benefit from increased revenue and higher producer surplus. The removal of the tax would result in an increase in total surplus, as both consumer and producer surplus increase. However, removing the excise tax would not lead to a decrease in producer surplus.

If the Government Removed the Excise Tax on Gasoline,assuming That