If the Price of Oak Lumber Increases,what Happens to Consumer

question 58

Multiple Choice

If the price of oak lumber increases,what happens to consumer surplus in the market for oak cabinets?

• A)Consumer surplus increases.
• B)Consumer surplus decreases.
• C)Consumer surplus will not change consumer surplus;only producer surplus changes.
• D)Consumer surplus depends on what event led to the increase in the price of oak lumber.

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Definitions:

Strike Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset.

Strike Price

The specified price at which the buyer of an option can buy (for a call option) or sell (for a put option) the underlying asset.

Net Profit

The amount of income that remains after all operating expenses, taxes, and costs have been subtracted from total revenue.