Corn chips and potato chips are substitutes.Good weather that sharply increases the corn harvest would
A)increase consumer surplus in the market for corn chips and decrease producer surplus in the market for potato chips.
B)increase consumer surplus in the market for corn chips and increase producer surplus in the market for potato chips.
C)decrease consumer surplus in the market for corn chips and increase producer surplus in the market for potato chips.
D)decrease consumer surplus in the market for corn chips and decrease producer surplus in the market for potato chips.

Question

Quizplus · Accepted Answer

Good weather increases the corn supply, lowering corn chip prices and increasing consumer surplus. Lower corn chip prices decrease demand for substitute potato chips, reducing producer surplus in that market.

Corn Chips and Potato Chips Are Substitutes