Table 5.3
-Refer to Table 5.3.The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specialises in producing fancy dress costumes.If the price of cowboy hats decreases from $38 to $30

Question

Table 5.3 
-Refer to Table 5.3.The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specialises in producing fancy dress costumes.If the price of cowboy hats decreases from $38 to $30

Quizplus · Accepted Answer

Producer surplus is the difference between what producers are willing to accept for a good versus what they actually receive. A decrease in price from $38 to $30 reduces the area above the marginal cost curve but below the price line, thus reducing producer surplus.

Table 5.3 -Refer to Table 5.3.The Table Above Lists the Marginal Cost