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AP® Microeconomics

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Consumer and Producer Surplus: Increase in Price of Sport Peppers

APMICR-6HYTDI

Sport peppers are an important ingredient in Chicago style hot dogs, which are produced in a perfectly competitive market. Other things equal, if the price of sport peppers increases, what will happen to the consumer and producer surpluses in the Chicago style hot dog market?

A

Consumer surplus will increase while producer surplus will decrease.

B

Consumer surplus will decrease while producer surplus will increase.

C

Consumer and producer surplus will both decrease.

D

Consumer and producer surplus will both increase.

E

Consumer surplus will decrease while producer surplus will remain unchanged.