Suppose That the Equilibrium Price in the Market for Widgets

question 155

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 happen to producer surplus

• A)It would necessarily increase even if the higher price resulted in a surplus of widgets.
• B)It would necessarily decrease because the higher price would create a surplus of widgets.
• C)It might increase or decrease.
• D)It would be unaffected.

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