Policies that restrict supply could generate an increase in social welfare because the increase in producer surplus could exceed the decrease in consumer surplus

Indicate whether the statement is true or false

False. One impact of a supply restriction is an exchange from consumers to producers. The net effect on social welfare is negative. Additionally, there is a deadweight loss. This is the additional surplus that could be generated if supply were not restricted. This effect is always negative. As a result, social welfare always declines in response to a supply restriction.