If price support policy increases producer surplus more than reducing consumer surplus,then

Question

Quizplus · Accepted Answer

A price support policy that increases producer surplus more than it reduces consumer surplus does not necessarily lead to a Pareto-superior allocation, an increase in social welfare, or an improvement in the efficiency of society. It may cause market distortions, inefficiencies, and potential welfare losses elsewhere in the economy.

If Price Support Policy Increases Producer Surplus More Than Reducing