The following question is about the effect that demand and supply elasticities have on the consumer and producer surpluses. Assuming that the market equilibrium output and price remain unchanged, which one of the following statements is correct?

Question

Accepted Answer

A less elastic supply curve will lead to a larger producer surplus.

Answer

A less elastic demand curve will lead to a smaller consumer surplus.

Answer

A more elastic demand curve will lead to a smaller producer surplus.

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The following question is about the effect that demand and supply elasticities h...

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