Assume a market that has an equilibrium price of $5.If the market price is set at $9,producer surplus:
A) rises for some producers because of the increased price.
B) decreases for some producers because of fewer transactions taking place.
C) Both A and B are true.
D) Neither of these statements is true.

Question

Quizplus · Accepted Answer

When the market price is set above the equilibrium price, some producers benefit from the higher price, increasing their surplus, while others may experience a decrease in surplus due to reduced quantity sold.

Assume a Market That Has an Equilibrium Price of $5