Assume there are three hardware stores,each willing to sell one standard model hammer in a given time period.House Depot can offer their hammer for a minimum of $7.Lace Hardware can offer the hammer for a minimum of $10.Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described,if the market price of hammers increased from $7 to $11:
A) more producers would participate in the market.
B) only Bob's Hardware would lose surplus.
C) both Bob's Hardware and Lace Hardware would lose surplus.
D) House Depot is the only producer that will gain surplus.

Question

Quizplus · Accepted Answer

House Depot and Lace Hardware would now be able to sell their hammers at a price above their minimum, so they would gain surplus. Bob's Hardware would still be selling at their minimum price, so they would not gain any additional surplus.

Assume There Are Three Hardware Stores,each Willing to Sell One