Assume the price of tomatoes increases.Which of the following causes would correspond to greater producer surplus?
A) an increase in supply
B) an increase in costs
C) a decrease in supply
D) an increase in demand

Question

Quizplus · Accepted Answer

An increase in demand for tomatoes, given the price increase, would lead to greater producer surplus because producers are able to sell more tomatoes at a higher price, thus increasing their earnings above their costs.

Assume the Price of Tomatoes Increases