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 $6 to $8:
A) producer participation in the market would increase.
B) producer participation in the market would decrease.
C) producer participation in the market would remain unchanged.
D) total producer surplus would increase by $2.

Question

Quizplus · Accepted Answer

When the market price increases from $6 to $8, House Depot, which can sell at a minimum of $7, will now participate in the market, increasing producer participation.

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