If agricultural price supports are combined with an output restriction,then there is:

Question

Quizplus · Accepted Answer

Combining agricultural price supports with output restrictions would lead to a decrease in the supply of agricultural goods, resulting in higher prices. This would benefit producers by increasing their revenue and thus their producer surplus. At the same time, consumers would bear the cost of higher prices and experience a decrease in their consumer surplus. Therefore, with output restrictions, there is a transfer of consumer surplus to the producer surplus.

If Agricultural Price Supports Are Combined with an Output Restriction,then