Lower input costs increase producer surplus

Steps:

• Define producer surplus as revenue minus total variable costs for units sold.
• Identify that surplus rises if selling price increases or production costs fall.
• Assess each option: check impact on carrot demand, price, or costs.
• Select option lowering costs without harming revenue.

Why B is correct:

• Lower carrot seed price reduces marginal production costs, shifting supply curve rightward and increasing surplus (area above supply curve up to equilibrium quantity).

Why the others are wrong:

• A: Shifts demand left, lowering price and quantity sold, reducing surplus.
• C: Cabbage price drop unrelated to carrot costs; may indirectly affect crop allocation but doesn't directly boost carrot surplus.
• D: Cuts government support, raising effective costs and shrinking surplus.

Final answer: B