A reduction in consumer surplus accompanied by an equivalent increase in producer surplus will
A) leave economic surplus unchanged.
B) result in relatively higher economic surplus.
C) result in relatively lower economic surplus.
D) make everyone in the society worse off.
E) make all producers better off.

Question

Quizplus · Accepted Answer

A reduction in consumer surplus accompanied by an equivalent increase in producer surplus means a tradeoff that benefits producers but costs consumers the same amount, resulting in economic surplus remaining unchanged (since economic surplus is the sum of consumer and producer surplus).

A Reduction in Consumer Surplus Accompanied by an Equivalent Increase