Which of the following will cause a decrease in producer surplus?
A)the imposition of a nonbinding price ceiling in the market
B)buyers expect the price of a good to be higher next month
C)the price of a substitute increases
D)income increases and buyers consider the good to be inferior

Question

Quizplus · Accepted Answer

When income increases and buyers consider the good to be inferior, demand for the good decreases, leading to a lower equilibrium price and quantity, which decreases producer surplus.

Which of the Following Will Cause a Decrease in Producer