Asked by Jazzy Asberry on Jul 13, 2024
Verified
Along a given upward-sloping supply curve,a decrease in the price of a good will _____ producer surplus.
A) increase
B) decrease
C) have no effect on
D) It's impossible to tell what will happen to producer surplus.
Producer Surplus
The gap between the price at which suppliers are prepared to offer a product and the actual amount they get for it.
Upward-Sloping Supply Curve
A graph showing that as the price of a good increases, the amount suppliers are willing to produce also increases.
- Evaluate diverse scenarios to ascertain changes in the aggregate surplus of producers owing to price adjustments.
Verified Answer
GH
Gulltabbsum HussainJul 19, 2024
Final Answer :
B
Explanation :
A decrease in the price of a good along an upward-sloping supply curve reduces producer surplus because producers receive less for each unit sold, diminishing the area between the supply curve and the market price.
Learning Objectives
- Evaluate diverse scenarios to ascertain changes in the aggregate surplus of producers owing to price adjustments.
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