If the cost to download a movie from the internet falls from $7.99 to $5.49 along an upward-sloping supply curve, producer surplus in the market for movie downloads is likely to:
A)increase.
B)decrease.
C)not change.
D)We cannot determine what producer surplus will do without information about consumer surplus.

Question

Quizplus · Accepted Answer

When the price of a good falls, producer surplus typically decreases because producers are receiving less money for each unit sold. The upward-sloping supply curve indicates that as price decreases, the quantity supplied might also decrease, further contributing to a decrease in producer surplus.

If the Cost to Download a Movie from the Internet