Assume There Are Three Hardware Stores in the Market for Hammers

question 45

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 increased from $8 to $14,total producer surplus would:

• A)increase from $8 to $14.
• B)increase from $1 to $12.
• C)decrease from $14 to $8.
• D)increase from $7 to $30.

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Definitions:

Average Fixed Cost

The fixed costs (those not varying with output) of production divided by the quantity of output produced.

Mixers

Devices or social events that are designed to combine different ingredients or allow people to meet and interact.

Bakes

Refers to food items that are cooked through baking, a method of cooking food using prolonged dry heat, often in an oven.

Average Total Cost

The per-unit cost of production, calculated by dividing the total cost by the quantity of output produced.