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

question 36

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 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:

Exemption Clause

A contract provision that seeks to limit or exclude one party’s liability for certain breaches or circumstances.

Breach of Condition

A failure to meet a critical term or condition of a contract, which may entitle the injured party to terminate the agreement.

Contract Law

A body of law regulating the agreements entered into between two or more parties that are enforceable by law.

Condition Subsequent

A future event or circumstance that, upon occurring, will terminate obligations under a contract or legal agreement.