Suppose the United States removes sugar quotas and the market price of sugar drops. If the demand curve for candy bars is downward-sloping, in the candy bar market we would expect:

Question

Quizplus · Accepted Answer

When the market price of sugar drops, the cost of producing candy bars decreases, leading to a lower price for candy bars. With a downward-sloping demand curve, this results in an increase in consumer surplus as consumers pay less for the same quantity or can buy more at a lower price.

Suppose the United States Removes Sugar Quotas and the Market