Producer surplus tends to be large when

Question

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When supply is price inelastic, producers are able to charge a higher price for their goods without experiencing a significant decrease in sales. This allows them to earn a larger producer surplus. When supply is price elastic, however, a small increase in price results in a large decrease in quantity demanded, reducing producer surplus. Similarly, when demand is price elastic or inelastic, it affects consumer surplus, not producer surplus.

Producer Surplus Tends to Be Large When