Economics question homework help....?

Question

In most markets, consumer surplus is a good measure of economic well-being as long as plicymakers want to respect the preferences of buyers. Give an example of, and briefly explain when policymakers may decide against respecting the preferences of buyers. Briefly explain what is meant by total surplus.

Answer 1

Sometimes in small corrupted countries government may defend interest of producers allowing to monopolize markets for some interest. In such cases both total and consumer surpluses shrinks but producer surplus increases.