If there is a decrease in supply, total surplus:
A)will increase.
B)will decrease.
C)will remain the same.
D)may change, but we can't tell how.

Question

Quizplus · Accepted Answer

A decrease in supply will lead to a decrease in the quantity supplied at every price, which will result in an increase in price. This decrease in supply will also cause a reduction in the total quantity demanded. As a result, total surplus will decrease due to the higher price and lower quantity exchanged.

If There Is a Decrease in Supply, Total Surplus