Equal Revenue Areas Imply Unchanged Total Revenue and Surplus Shifts

Steps:

• Rectangle OPQR is initial total revenue (price OR × quantity at OR).
• Rectangle LMN is new total revenue (price ON × quantity at ON), equal area means total revenue constant.
• Price rise from OR to ON reduces quantity, shifting consumer surplus downward.
• Consumer surplus falls by trapezoid RS MN (rectangle part + triangle under demand curve to new quantity).

Why A is correct:

• By definition, consumer surplus change equals area between demand curve and price levels from new to original quantity, labeled RS MN here.

Why the others are wrong:

• B: Total revenue unchanged (equal areas), so does not fall by MSO.
• C: Equal revenues imply unitary arc elasticity, but statement specifies "for changes," which misstates point vs. arc elasticity.
• D: Producer surplus rises only by rectangle (ON - OR) × new quantity, not full RS MN (excludes deadweight loss triangle).

Final answer: A