-Refer to the diagram above.If producers all agree to raise the price of milk from $1.00 to $1.25,then which of the following is NOT true?
A) Consumer surplus falls by $22.50.
B) There would be a transfer of $20 worth of consumer surplus to the sellers compared to the previous equilibrium price.
C) Producers' net gain in additional producer surplus is $20 compared to the previous equilibrium price.
D) Producer surplus rises by $18.
E) Some producers are better off and some producers are worse off.

Question

-Refer to the diagram above.If producers all agree to raise the price of milk from $1.00 to $1.25,then which of the following is NOT true?
A) Consumer surplus falls by $22.50. 
B) There would be a transfer of $20 worth of consumer surplus to the sellers compared to the previous equilibrium price. 
C) Producers' net gain in additional producer surplus is $20 compared to the previous equilibrium price. 
D) Producer surplus rises by $18. 
E) Some producers are better off and some producers are worse off.

Quizplus · Accepted Answer

The Answer of 
-Refer to the diagram above.If producers all agree to raise the price of milk from $1.00 to $1.25,then which of the following is NOT true?
A) Consumer surplus falls by $22.50. 
B) There would be a transfer of $20 worth of consumer surplus to the sellers compared to the previous equilibrium price. 
C) Producers' net gain in additional producer surplus is $20 compared to the previous equilibrium price. 
D) Producer surplus rises by $18. 
E) Some producers are better off and some producers are worse off.

-Refer to the Diagram Above