-Refer to the diagram above.If producers all agree to raise the price of milk from $1.00 to $1.25,then
A) the loss of total economic surplus is $2.50.
B) the loss of total economic surplus is $2.00.
C) the loss of total economic surplus is $4.50.
D) consumer surplus falls by $4.50.
E) the net gain in producer surplus more than offsets the deadweight loss.

Question

-Refer to the diagram above.If producers all agree to raise the price of milk from $1.00 to $1.25,then
A) the loss of total economic surplus is $2.50. 
B) the loss of total economic surplus is $2.00. 
C) the loss of total economic surplus is $4.50. 
D) consumer surplus falls by $4.50. 
E) the net gain in producer surplus more than offsets the deadweight loss.

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
A) the loss of total economic surplus is $2.50. 
B) the loss of total economic surplus is $2.00. 
C) the loss of total economic surplus is $4.50. 
D) consumer surplus falls by $4.50. 
E) the net gain in producer surplus more than offsets the deadweight loss.

-Refer to the Diagram Above