Asked by
Kenny Magar
on Dec 17, 2024Verified
Moving production from a high-cost producer to a low-cost producer will
A) lower total surplus.
B) raise total surplus.
C) lower producer surplus.
D) raise producer surplus but lower consumer surplus.
Total Surplus
Total surplus refers to the sum of consumer surplus and producer surplus in a market, representing the overall benefit that market participants gain from engaging in trade.
High-cost Producer
A producer or company which has higher costs of production compared to competitors, often due to inefficient processes or higher input costs.
Low-cost Producer
A manufacturer or service provider with a competitive advantage allowing them to offer goods or services at a lower price than competitors, often due to operational efficiencies.
- Familiarize with the welfare consequences of market equilibrium and disequilibrium states.
Verified Answer
WG
Learning Objectives
- Familiarize with the welfare consequences of market equilibrium and disequilibrium states.