Which of the following is a correct statement?
A) Consumer surplus is an external benefit.
B) A government subsidy paid to a producer is an external benefit.
C) Producer surplus is an external benefit.
D) None of the above statements is correct.

Question

Quizplus · Accepted Answer

Consumer surplus, producer surplus, and government subsidies are not considered external benefits. External benefits refer to positive effects on third parties not directly involved in a transaction, which is different from the concepts of consumer and producer surplus, which measure benefits to buyers and sellers in a market. A government subsidy to a producer is a financial assistance and not an external benefit.

Which of the Following Is a Correct Statement