Assume There Are Three Hardware Stores in the Market for Hammers

question 21

Multiple Choice

Assume there are three hardware stores in the market for hammers and that all three markets produce a single,standard model hammer.House Depot is an enormous mass producer of hammers and can offer a hammer for sale for a minimum of $7.Lace Hardware is a franchise and can offer the hammer for sale for a minimum of $10.Bob's Hardware store is a family owned and operated,independent hardware store and can offer hammers at a minimum price of $13.
Given the scenario described,if the market price of hammers decreased from $15 to $13,which of the following can be said with certainty?

• A)Producer participation in the market would decrease.
• B)Total producer surplus would decrease.
• C)Only Bob's Hardware will experience a drop in producer surplus.
• D)Producer participation in the market will not be affected.

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Definitions:

Human Resource Management

A function in organizations designed to maximize employee performance in service of an employer's strategic objectives.

Accounting Sales

The recorded revenue from goods or services sold or provided to customers, reflecting income generated by a business.

Subsidiary Ledger

A detailed ledger that contains all the transaction information of a specific account, which then summarizes to a general ledger.

Cash Payments Journal

A specialized accounting journal used to record all payments made by a business, including expenses and purchases.