The Surgeon General announces that eating apples promotes healthy teeth. As a result, the equilibrium price of apples
A)increases, and producer surplus increases.
B)increases, and producer surplus decreases.
C)decreases, and producer surplus increases.
D)decreases, and producer surplus decreases.

Question

Quizplus · Accepted Answer

With the announcement that eating apples promotes healthy teeth, there is an increase in the demand for apples. This will cause the equilibrium price of apples to increase, leading to an increase in producer surplus for apple producers.

The Surgeon General Announces That Eating Apples Promotes Healthy Teeth