Which of the Following Events Would Decrease Producer Surplus

question 320

Multiple Choice

Which of the following events would decrease producer surplus?

• A) Sellers' costs stay the same and the price of the good increases.
• B) Sellers' costs increase and the price of the good stays the same.
• C) Sellers' costs decrease and the price of the good increases.
• D) All of the above are correct.

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Definitions:

Collection Float

The time period between when a check is deposited and when the funds become available in the recipient's account, affecting the cash flow and liquidity.

Float Management

The practice of managing the time between when a check is deposited and when it clears, to optimize the use of funds.

Target Cash Balance

The optimal amount of cash a company seeks to maintain to handle operational and transactional needs efficiently.

Carrying Costs

Expenses associated with holding inventory, including storage costs, insurance, and loss due to obsolescence.