Figure 7-12 -Refer to Figure 7-12.When the Price Falls from P2 to Falls

question 446

Multiple Choice

Figure 7-12

-Refer to Figure 7-12.When the price falls from P2 to P1,which of the following would not be true?

• A) The sellers who still sell the good are worse off because they now receive less.
• B) Some sellers leave the market because they are not willing to sell the good at the lower price.
• C) The total cost of what is now sold by sellers is actually higher than it was before the decrease in the price.
• D) Producer surplus would fall by area A + B.

---

Definitions:

Decrease Retailer Prices

The activity of reducing the cost at which goods or services are sold by retail outlets to the consumer market.

Vertical Contracts

Agreements between firms at different levels of the supply chain, such as between a manufacturer and a retailer, aimed at controlling the conditions of sale or establishing terms of collaboration.

Consumers

Individuals or organizations that use economic services or goods, playing a central role in economic systems as the end-users of products.

Promotional Activities

Marketing efforts aimed at increasing awareness, sales, and interest in a product or service through various strategies and channels.