If the government removed the excise tax on gasoline, assuming that neither demand nor supply is perfectly inelastic, which of the following would NOT occur?

Question

Quizplus · Accepted Answer

Removing the excise tax on gasoline would lead to an increase in both consumer and producer surplus, as well as an increase in total surplus, due to the reduction in the price burden. A decrease in producer surplus would not occur.

If the Government Removed the Excise Tax on Gasoline, Assuming