Asked by Rafaiel Ghazaryan on Jul 07, 2024
Verified
If the price of a good rises along an upward-sloping supply curve,then producer surplus:
A) will increase.
B) will decrease.
C) will remain the same.
D) may change,but we can't tell how.
Producer Surplus
The difference between what producers are willing to accept for a good or service versus what they actually receive, often depicted as an area on a graph.
Supply Curve
A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to sell.
- Gain insight into the idea of producer surplus and the impact market fluctuations have on it.
- Understand the linkage between adjustments in the supply curve, price changes, and the surplus of producers.
Verified Answer
AB
Adrian BravoJul 10, 2024
Final Answer :
A
Explanation :
When the price of a good rises along an upward-sloping supply curve, it means that producers are able to sell their goods at a higher price, which increases their revenue. As a result, producer surplus – which is the difference between the market price and the cost of production – will increase.
Learning Objectives
- Gain insight into the idea of producer surplus and the impact market fluctuations have on it.
- Understand the linkage between adjustments in the supply curve, price changes, and the surplus of producers.
Related questions
If the Supply Curve of Ice Cream Is Upward-Sloping and ...
Mountain River Adventures Offers Whitewater Rafting Trips Down the Colorado ...
Luis Is Willing to Sell His Pool Table for No ...
A Competitive Market for Cell Phone Chargers Is in Equilibrium ...
Along the Upward-Sloping Supply Curve for Brownies,a Decrease in the ...