Answer:
What government interventions cause consumer or producer surplus?
There are two main economic effects of a tax: a fall in the quantity traded and a diversion of revenue to the government. A tax causes consumer surplus and producer surplus (profit) to fall..
Explanation:
its a tax
The policy market interventions are relying on both the causes' of consumer surplus and producer surplus as main reason in price fluctuation.
What is consumer?
The term “consumer” refers to a person who consumes goods and services. The consumer purchases the products and services with the exchange of money. The consumer is satisfied with the needs and wants. The consumer purchases goods for personal use, not for manufacturing purposes.
Policy market intervention change the market conditions of demand and supply. The prices are simultaneously changed for the same reason that the taxes, price ceiling, subsidies, and price floor are affected by the demand.
So, the price level increases of goods in the surplus are created as a benefit to both the consumer and the producer.
Therefore, the policy market interventions cause on both, they rely on consumer or producer surplus.
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