If Prices Rise, What Happens to Producer Surplus (All Other

question 93

Multiple Choice

If prices rise, what happens to producer surplus (all other things being equal) ?

• A) It falls, because fewer people buy goods.
• B) It falls, because it encourages competition, which reduces profits.
• C) It rises, because each producer is getting more surplus per good sold.
• D) It stays the same, because the forces increasing the surplus counteract the forces reducing it.

---

Definitions:

Duty

A moral or legal obligation to perform or refrain from performing some action.

Corporation

A legal entity that is separate and distinct from its owners, with rights and liabilities, capable of conducting business.

Promoter

An individual or company responsible for organizing and often financing concerts, plays, or other events.

Duty to Be Careful

The duty to be careful, often referred to as a duty of care, is a legal obligation imposed on individuals to act with the caution and attentiveness of a reasonable person to avoid causing harm to others.