The market for plywood (a sheet of wood used in construction) is characterized by the following demand and supply equations: QD = 800 - 10P and QS = 50P - 1,000, where P is the price per sheet of plywood and Q measures the quantity of plywood. If the government imposes a price ceiling of $25 per sheet of plywood, producer surplus:
A) increases by $892.
B) decreases by $3,750.
C) decreases by $635.
D) decreases by $1,875.
Correct Answer:
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