Asked by
michael jacobo
on Nov 17, 2024Verified
Which of the following will cause an increase in producer surplus?
A) The imposition of a binding price ceiling in the market
B) Buyers expect the price of the good to be lower next month
C) The price of a substitute increases
D) Income increases and buyers consider the good to be inferior
Producer Surplus
The difference between what producers are willing to accept for a good or service versus what they actually receive, usually measured above supply curve.
Binding Price Ceiling
A government-imposed maximum price that is set below the equilibrium price, resulting in a shortage of the good or service.
Substitute
A good or service that can replace another to satisfy similar needs or desires, often leading to competition between producers.
- Discern the factors influencing changes in producer surplus.
Verified Answer
ST
Learning Objectives
- Discern the factors influencing changes in producer surplus.