A tax leads to a(n) _____ in consumer surplus and a(n) _____ in producer surplus.

A) increase;increase
B) increase;decrease
C) decrease;increase
D) decrease;decrease

Consumer Surplus

The disparity between the total sum consumers are ready to pay for a product or service and the actual amount they end up spending.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual price they receive, reflecting extra benefit or profit.

Tax

Compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.