Assume a Market Has an Equilibrium Price of $7

Multiple Choice

Assume a market has an equilibrium price of $7. If the market price is set at $3, which of the following statements is true?

A) Some surplus is transferred from consumers to producers, but total surplus falls.
B) All surplus is transferred from producers to consumers, and total surplus stays the same.
C) Some surplus is transferred from producers to consumers, but total surplus falls.
D) Some surplus is transferred from consumers to producers, causing total surplus to increase.