Assume There Are Three Hardware Stores,each Willing to Sell One

question 130

Multiple Choice

Assume there are three hardware stores,each willing to sell one standard model hammer in a given time period.House Depot can offer their hammer for a minimum of $7.Lace Hardware can offer the hammer for a minimum of $10.Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described,if the market price of hammers decreased from $15 to $11:

• A) total producer surplus would fall by $4.
• B) producer surplus for each producer falls by $4.
• C) House Depot's producer surplus falls by $4.
• D) total producer surplus falls by $8.

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Definitions:

High

A general term that can refer to being at or in an elevated position or state, indicating a level above average or normal.

Low

Referring to something that is below average in value, intensity, or magnitude.

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