Assuming peaches are a normal good and consumer incomes rise, producer surplus in the peach market:
A) increases.
B) decreases.
C) remains unchanged.
D) equals the deadweight loss increase.

Question

Quizplus · Accepted Answer

As consumer incomes rise, they are willing and able to pay more for peaches, leading to an increase in demand and a higher equilibrium price. This increase in price will result in an increase in producer surplus as producers can sell their peaches at a higher price than before.

Assuming Peaches Are a Normal Good and Consumer Incomes Rise