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 $9 to $13:
A) House Depot's producer surplus would increase by $4.
B) Lace Hardware Hardware's producer surplus would increase by $3.
C) Bob's Hardware's producer surplus would remain unchanged.
D) All of these statements are true.

Question

Quizplus · Accepted Answer

House Depot's producer surplus would increase by $4 (from $2 to $6), Lace Hardware's producer surplus would increase by $3 (from $1 to $4), and Bob's Hardware's producer surplus would remain unchanged (at $0).

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