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Economics (AS & A Level) · May / June 2021 · Paper 13 · Question 12

9708Consumer and producer surplus

The diagram shows the outcome when a landowner, who had allowed motorists to park on his field at no cost, introduces a parking charge of $1. What happens as a result of the change?

  1. AThe landowner gains a surplus of Y + Z.
  2. BThe motorist gains a surplus of X + Y.
  3. CThe ownership of surplus Y changes.
  4. DThere is a total surplus of X + Y + Z.

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Correct answer: C. The ownership of surplus Y changes.

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