Final answer:
Reallocating sales from Ed to Claire will decrease total producer surplus because Claire's production cost is higher than the equilibrium price, causing her to have less or potentially negative surplus compared to Ed, who has a lower production cost.
Step-by-step explanation:
If a good has an equilibrium cost to a seller of $50, and Claire has a cost of $75 to produce this good while Ed has a cost of $45, reallocating sales from Ed to Claire will have a negative effect on producer surplus.
Producer surplus is the amount that a seller is paid for a good minus the seller's actual cost. Since Ed can produce the good for less than the equilibrium price, he gains more producer surplus than Claire, who has a higher production cost than the market price.
Reallocating sales to Claire, whose cost exceeds the equilibrium price, would not only reduce her producer surplus but could actually generate a loss because her cost is above the market price.
In contrast, Ed, who produces at $45, has a cost below the equilibrium price and is able to gain a surplus on each unit sold. Shifting sales from Ed to Claire would decrease the total producer surplus in the market.