ECONOMICS
CONSUMERS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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lower total surplus.
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raise total surplus.
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lower producer surplus
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raise producer surplus but lower consumer surplus.
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Detailed explanation-1: -In this case, moving production from a high-cost producer to a low cost producer will lower the total cost to sellers and raise total surplus. Similarly, an allocation is inefficient if a good is not being consumed by the buyers who value it most highly.
Detailed explanation-2: –moving production from a high-cost producer to a lower-cost producer will reduce the total cost to sellers and raise total surplus.
Detailed explanation-3: -Producer surplus is likely to increase when a firm benefits from an increase in market demand. For example, farmers might be able to increase their prices when consumer demand rises – this is shown in the diagram.
Detailed explanation-4: -The size of the producer surplus and its triangular depiction on the graph increases as the market price for the good increases, and decreases as the market price for the good decreases.
Detailed explanation-5: -A producer surplus occurs when goods are sold at a higher price than the lowest price the producer was willing to sell for.