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

question 39

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 $13,which of the following can be said with certainty?

• A) Bob's Hardware would no longer participate in the market.
• B) Total producer surplus would decrease.
• C) Only Bob's Hardware will experience a drop in producer surplus.
• D) Bob's Hardware would continue to participate in the market.

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Definitions:

Figure-ground Constancy

A visual perception principle where an object (figure) is perceived distinctly from its surrounding area (ground).

Phi Phenomenon

The perception of unbroken movement created by quickly viewing a series of independent objects one after another, known as an optical illusion.

Monocular Cue

Visual information that allows perception of depth and distance using one eye.

Clearness

The quality of being easily understandable or free from ambiguity.