Consumer surplus and producer surplus can:
A)occur simultaneously.
B)are independent.
C)If there is a consumer surplus, there will be no producer surplus.
D)If there is a producer surplus, there will be no consumer surplus.

Question

Quizplus · Accepted Answer

Consumer surplus and producer surplus can occur simultaneously. Consumer surplus is the difference between the price a consumer is willing to pay for a good and the actual price they pay. Producer surplus is the difference between the price a producer receives for a good and the cost to produce it. When a market is in equilibrium, both consumer and producer surplus exist. Consumers receive a benefit from being able to purchase the good at a price lower than what they are willing to pay, while producers receive a benefit from selling the good at a price higher than their cost of production. Therefore, choice A is the correct answer.

Consumer Surplus and Producer Surplus Can