Suppose there is an early freeze in California that reduces the size of the lemon crop.What happens to consumer surplus in the market for lemons?
A)It increases.
B)It decreases.
C)It is not affected by this change in market forces.
D)We would have to know whether the demand for lemons is elastic or inelastic to make this determination.

Question

Quizplus · Accepted Answer

A reduction in the lemon crop would cause a decrease in the supply of lemons, which in turn would result in an increase in the equilibrium price of lemons. As a result, consumers would have to pay more for lemons, which would decrease consumer surplus. Therefore, the correct answer is B.

Suppose There Is an Early Freeze in California That Reduces