In the market for CDs, the producer surplus will decrease if
A) the supply of CDs increases.
B) the price of a CD increases.
C) the price of a CD decreases.
D) the marginal cost of a CD decreases.

Question

Quizplus · Accepted Answer

Producer surplus decreases when the price of a CD decreases because producers receive less for each CD sold, reducing the difference between the market price and the minimum price at which producers are willing to sell.

In the Market for CDs, the Producer Surplus Will Decrease