Asked by Chelsea Garcia-Perez on Jul 14, 2024
Verified
Along a given upward-sloping supply curve,a decrease in price will cause producer surplus to:
A) increase.
B) decrease.
C) stay the same.
D) We cannot determine what producer surplus will do without information about the demand curve.
Upward-Sloping Supply Curve
A graphical representation showing that as the price of a good increases, producers are willing and able to supply more of it.
- Examine various situations to identify modifications in the overall surplus of producers resulting from alterations in prices.
Verified Answer
AN
Amber NarezJul 17, 2024
Final Answer :
B
Explanation :
Producer surplus decreases when the price decreases along an upward-sloping supply curve because producers receive less for each unit sold, reducing the area between the price and the supply curve, which represents producer surplus.
Learning Objectives
- Examine various situations to identify modifications in the overall surplus of producers resulting from alterations in prices.
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