Which of the Following Would Cause an Increase in the Market

question 3

Multiple Choice

Which of the following would cause an increase in the market supply of mountain bikes?

• A)a decrease in the demand for mountain bikes
• B)an increase in taxes levied on mountain bike manufacturers
• C)an increase in the cost of components used to assemble mountain bikes
• D)an increase in the number of firms making mountain bikes

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Definitions:

Producer Surplus

The difference between the amount producers are willing and able to supply goods for versus the amount they actually receive due to market prices.

Total Surplus

The sum of consumer surplus and producer surplus, representing the total net gain to society from the production and consumption of goods and services.

Tariff Revenue

Income that a government collects from imposing duties on imported goods.

Consumer Surplus

The divergence between the amount consumers are willing to pay for a product or service and the amount they actually pay.