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Economics (AS & A Level) · Oct / Nov 2022 · Paper 11 · Question 11

9708Consumer and producer surplus

The diagram shows the impact of a fall in the price of oil that will lead to a fall in energy costs for many manufacturers. What will be the impact of this change on consumer and producer surplus?

  1. Aconsumer surplus falls; producer surplus falls
  2. Bconsumer surplus falls; producer surplus rises
  3. Cconsumer surplus rises; producer surplus falls
  4. Dconsumer surplus rises; producer surplus rises

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Correct answer: D. consumer surplus rises; producer surplus rises

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