If the Cost of Producing Sofas Decreases,then Consumer Surplus in the Sofa

question 63

Multiple Choice

If the cost of producing sofas decreases,then consumer surplus in the sofa market will

• A)increase.
• B)decrease.
• C)remain constant.
• D)increase for some buyers and decrease for other buyers.

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Definitions:

Physically Separated

A state or condition where two or more entities are not connected or in direct contact with each other, often referring to geographical distance.

Elastic Demand

A situation where the demand for a product or service significantly changes in response to price fluctuations, with greater sensitivity indicating higher elasticity.

Single Price

A market condition where a good or service is sold at the same price to all customers, regardless of purchase quantity or location.

Nondiscriminating Monopolist

A monopolist that charges the same price to all customers, as opposed to engaging in price discrimination where different prices are charged to different customers.