Assume There Are Three Hardware Stores, Each Willing to Sell

question 114

Multiple Choice

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $8 to $11, total producer surplus would:

• A) increase to $5.
• B) decrease to $2.
• C) increase to $17.
• D) decrease to $7.

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Definitions:

Perfection

The series of legal steps a secured party takes to protect its right in collateral from other creditors that want to have their debts returned through the same collateral.

Possession

The act of having or holding property in one's control; this can range from ownership of land to possession of items or goods.

Security Agreement

An agreement in which a debtor gives a secured interest to a secured party.

Collateral

The property that is subject to a secured interest.