ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?
a. The price of a dozen eggs increases from 40 cents to 55 cents.
b. The price of a dozen eggs increases from 55 cents to 70 cents.
c. The price of a dozen eggs increases from 55 cents to 75 cents.
d. All of these price increases would cause both companies to experience a loss in producer surplus.
c
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When the value of a payment is adjusted in proportion to changes in the CPI, economists refer to that as
a. nominalization b. realization c. indexation d. stabilization e. depreciation
According to the quantity theory of money, an increase in the money supply leads to:
A. a decrease in prices, as there are more dollar bills spent on the same number of goods and services. B. an increase in prices, as there are more dollar bills spent on the same number of goods and services. C. an increase in prices, as there are the same dollar bills spent on a greater number of goods and services. D. a decrease in price, as there are the same dollar bills spent on a greater number of goods and services.
The upward sloping portion of the supply curve for labor implies that
A. the law of diminishing returns has settled in. B. higher wages lead to fewer hours of work supplied. C. higher wages lead to an increase in hours of work supplied. D. a minimum wage law is in effect.
If consumption is $8 billion, investments is $4 billion, government purchases are $2 billion, imports are $1 billion, and exports are $2 billion, GDP must equal:
A. $17 billion. B. $14 billion. C. $15 billion. D. $16 billion.