Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described, if the market price of hammers decreased from $15 to $11:
A. total producer surplus would fall by $4.
B. total producer surplus falls by $8.
C. House Depot's producer surplus falls by $4.
D. producer surplus for each producer falls by $4.
Answer: C
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A. is a major consumer of the good. B. can produce more units of the good. C. has a lower opportunity cost of producing the good. D. is a more efficient producer of the good.
If a tax is imposed in a bargaining game, the players' cooperative surplus
A) increases. B) declines. C) remains unchanged. D) increases for one player and decreases for the other.
Corporate profits can be broken into three categories: dividends, undistributed profits, and corporate profits taxes
Indicate whether the statement is true or false
A decrease in the price of bubble gum below equilibrium will
A. Shift the bubble gum demand curve to the right. B. Cause a shortage of bubble gum. C. Cause a surplus of bubble gum. D. Shift the bubble gum supply curve to the right.