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 $13, which of the following can be said with certainty?
A. Only Bob's Hardware will experience a drop in producer surplus.
B. Bob's Hardware would continue to participate in the market.
C. Bob's Hardware would no longer participate in the market.
D. Total producer surplus would decrease.
Answer: D
You might also like to view...
How would expansionary monetary policy affect the AD curve?
A. It would shift to the right. B. It would fall. C. It would become more static. D. It would shift to the left.
Refer to the information provided in Figure 23.4 below to answer the question(s) that follow.
Figure 23.4Refer to Figure 23.4. Which consumption function implies the smallest MPS?
A. C1 B. C2 C. C3 D. cannot be determined from the figure
A monopoly price reflects a good's marginal utility
a. True b. False Indicate whether the statement is true or false
The fact that there are fewer and fewer potential investments that will generate returns high enough to make the cost of paying back a loan worthwhile is reflected in the:
A. downward-slope of the demand curve in the market for loanable funds. B. upward-slope of the demand curve in the market for loanable funds. C. downward-slope of the supply curve in the market for loanable funds. D. upward-slope of the supply curve in the market for loanable funds.