If the Cost to Download a Song from the Internet

question 90

Multiple Choice

If the cost to download a song from the Internet falls from $0.99 to $0.50 along an upward-sloping supply curve,producer surplus in the market for iPod players is likely to:

• A) increase.
• B) decrease.
• C) not change.
• D) We cannot determine what producer surplus will do without information about consumer surplus.

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Definitions:

House Painter

A professional tradesperson responsible for painting and decorating buildings, ensuring protection and enhancing aesthetic appeal.

Houses

Structures used as living quarters for one or more persons, typically families.

Diminishing Marginal Product

The principle stating that as additional units of a variable input are added to a fixed input, the additional output from each new unit of input will eventually decrease.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced.