Suppose there is an early freeze in California that reduces the size of the lemon crop.What happens to consumer surplus in the market for lemons?
A)Consumer surplus increases.
B)Consumer surplus decreases.
C)Consumer surplus is not affected by this change in market forces.
D)We would have to know whether the demand for lemons is elastic or inelastic to make this determination.

Question

Quizplus · Accepted Answer

With a reduction in the size of the lemon crop, the supply of lemons decreases. This leads to an increase in the price of lemons, resulting in a decrease in consumer surplus. Therefore, consumer surplus decreases.

Suppose There Is an Early Freeze in California That Reduces