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

Question

Quizplus · Accepted Answer

Producer surplus decreases when the price of a CD decreases because producers receive less revenue for each unit sold, reducing the difference between what they are willing to accept and what they actually receive.

In the Market for CDs, the Producer Surplus Will Decrease