When the market price increases,producer surplus increases because (1) producer surplus received by existing sellers increases and (2) new sellers enter the market.

Question

Quizplus · Accepted Answer

When the market price increases, the producer surplus of existing sellers increases because they earn more profit per unit sold. Additionally, new sellers may enter the market to take advantage of higher prices, increasing the overall supply and competition. This can also contribute to an increase in producer surplus.

When the Market Price Increases,producer Surplus Increases Because (1) Producer