If the government mandated a price increase from P1 to a higher price, then a. total surplus would remain unchanged. b. total surplus would increase, since producer surplus would increase. c. consumer surplus would increase. d. total surplus would decrease.

Question

Business

Regina Drake

31 March, 10:18

If the government mandated a price increase from P1 to a higher price, then a. total surplus would remain unchanged. b. total surplus would increase, since producer surplus would increase. c. consumer surplus would increase. d. total surplus would decrease.

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Answers (1)

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Tess French · Answer 1

d. total surplus would decrease.

Explanation:

Price higher than P1 would create inefficiency and deadweight loss in the economy. thus, total surplus would decrease.