Ceteris paribus, an increase in the price of a good will cause the
A) quantity demanded of the good to increase.
B) quantity supplied of the good to decrease.
C) producer surplus derived from the good to increase.
D) supply of the good to decrease.

Question

Quizplus · Accepted Answer

An increase in the price of a good, ceteris paribus, will lead to an increase in producer surplus because producers receive more revenue for each unit sold, assuming costs remain constant.

Ceteris Paribus, an Increase in the Price of a Good