Suppose That the Equilibrium Price in the Market for Widgets

question 131

Multiple Choice

Suppose that the equilibrium price in the market for widgets is $8.If a law increased the minimum legal price for widgets to $9,what would be the outcome

• A)The resulting increase in consumer surplus would be larger than any possible loss of producer surplus.
• B)The resulting increase in consumer surplus would be smaller than any possible loss of producer surplus.
• C)Any possible increase in producer surplus would be larger than the loss of consumer surplus.
• D)Any possible increase in producer surplus would be smaller than the loss of consumer surplus.

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Definitions:

Breach Of Warranty

The failure to fulfill the terms of a promise or guarantee made about the quality, condition, or performance of a product or service.

Seller

An individual or entity that offers goods or services for sale to consumers or other businesses.

Express Warranty

A seller's explicit promise or guarantee about the condition or quality of a product.

Mechanic

A skilled worker specialized in constructing, repairing, or maintaining machinery, vehicles, or other technical systems.