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Consumer and producer surplus

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Question 9

The diagram below shows the market for a raw material used in manufacturing. The market equilibrium shifts from point A A\,A to point B B\,B following the introduction of an environmental safety regulation that increases production costs.

Market diagram showing a decrease in supply

Which area represents the new producer surplus?

DNBDNBDNB

CMACMACMA

RDBRDBRDB

CDABCDABCDAB

Consumer and producer surplus Questions

  1. A Level
  2. /Economics
  3. /Consumer and producer surplus