Asked by Özge SA?IR on Jul 30, 2024
Verified
Assuming that the supply curve of cupcakes is upward-sloping and demand for cupcakes decreases,there is a(n) _____ in _____ surplus.
A) increase;producer
B) increase;consumer
C) increase;total
D) decrease;producer
Producer Surplus
The difference between the amount a producer is willing to accept for a good or service and the actual amount received from selling it at the market price.
Cupcakes
Small, individually-sized cakes that are typically frosted and decorated, often used to celebrate events or milestones.
- Explore various instances to detect changes in the overall producer surplus resulting from price variations.
- Compare and contrast producer surplus with consumer surplus and total surplus.
Verified Answer
ZK
Zybrea KnightJul 31, 2024
Final Answer :
D
Explanation :
When demand for cupcakes decreases, the price that consumers are willing to pay also decreases. This leads to a lower equilibrium price and quantity, reducing the area representing producer surplus because producers are receiving less for their goods than before.
Learning Objectives
- Explore various instances to detect changes in the overall producer surplus resulting from price variations.
- Compare and contrast producer surplus with consumer surplus and total surplus.