Assume There Are Three Hardware Stores in the Market for Hammers

question 40

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 $17 to $12:

• A)producer participation in the market would increase.
• B)producer participation in the market would decrease.
• C)producer participation in the market would not be affected.
• D)total producer surplus would remain unchanged.

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Definitions:

Distal Stimuli

Objects and events in the external world that provide the basis for sensory input.

Proximal Stimuli

The patterns of stimuli from objects and events that actually reach your senses like the light hitting the retina or sound waves hitting the eardrum.

Top-Down Processing

A cognitive process that starts with the brain applying what it knows and what it expects to perceive and interpret sensory information.

Bottom-Up Processing

A cognitive approach in which perception starts with an incoming stimulus and builds upwards without preconceived knowledge of what is being observed.