If tariffs on lumber from Canada increase construction costs, producer surplus for new homes increases.

Question

Quizplus · Accepted Answer

If tariffs on lumber from Canada increase construction costs, the producer surplus for new homes decreases because it becomes more expensive for builders to obtain the lumber needed for construction. This may lead to higher prices for new homes or a decrease in supply, which would decrease producer surplus.

If Tariffs on Lumber from Canada Increase Construction Costs, Producer