Assume a market that has an equilibrium price of $5. If the market price is set at $9, producer surplus:
A. decreases for some producers because of fewer transactions taking place.
B. rises for some producers because of the increased price.
C. Both A and B are true.
D. Neither of these statements is true.
Answer: C
You might also like to view...
Suppose homebuyers believe that prices will fall over the next six months to a year. This would tend to
A) increase their demand for homes today. B) decrease their demand for homes six months from today. C) decrease their demand for homes today. D) have no effect on their demand today or six months from today.
High prices do not occur in laissez-faire markets.
Answer the following statement true (T) or false (F)
Accounting profits are calculated as:
A. total revenue minus implicit costs. B. total revenue minus explicit costs. C. total revenue minus all opportunity costs, explicit and implicit. D. None of these is true.
Mr. Peabody chooses to invest in companies that produce goods and services at the lowest possible cost. Mr. Peabody is investing in companies that are
A) allocatively efficient. B) productively efficient. C) guaranteed to make a profit. D) all of the above.