According to the graph shown,if the market price decreases (all else staying the same):
A) producer surplus would increase.
B) producer surplus would decrease.
C) total surplus would increase.
D) quantity would increase.

Question

According to the graph shown,if the market price decreases (all else staying the same):
A) producer surplus would increase. 
B) producer surplus would decrease. 
C) total surplus would increase. 
D) quantity would increase.

Quizplus · Accepted Answer

According to the graph, when the market price decreases, the area between the supply curve and the new market price (P2) decreases, resulting in a decrease in producer surplus. Therefore, the correct answer is B.

According to the Graph Shown,if the Market Price Decreases (All