Consider the Market for Socks

question 14

Multiple Choice

Consider the market for socks.The current price of a pair of plain white socks is $5.00.Two consumers,Igor and Samir,are willing to pay $7.25 and $8.00,respectively,for a pair of plain white socks.Two sock manufacturers are willing to sell plain white socks for as little as $4.00 and $4.15 per pair.What is the total producer surplus in this market?

• A) $0.15
• B) $8.15
• C) $0.85
• D) $1.00
• E) $1.85

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Definitions:

Pure Monopoly Firm

A market structure where a single entity exclusively controls the supply of a product or service without any close substitutes.

Inelastic Range

A portion of the demand curve where changes in price have little to no effect on the quantity demanded of a good or service.

Demand Curve

The demand curve graphically represents the relationship between the price of a good and the quantity demanded by consumers over a certain period, typically showing a downward slope from left to right.

Monopolist

A single seller in a market who has significant control over the entire market, including the ability to influence prices and market conditions.