Economics 9708 · AS & A Level · Price elasticity of supply

Price elasticity of supply — practice question

A market is in equilibrium at price $5. Market supply changes from being inelastic at each price to become elastic at each price. The market equilibrium price remains unchanged. What effect does this have on consumer surplus and producer surplus?

  • Aconsumer surplus rises; producer surplus falls
  • Bconsumer surplus rises; producer surplus unchanged
  • Cconsumer surplus unchanged; producer surplus falls
  • Dconsumer surplus unchanged; producer surplus unchanged

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