Along the upward-sloping supply curve for brownies,a decrease in the price of brownies will:
A)increase producer surplus.
B)decrease producer surplus.
C)increase consumer surplus.
D)increase producer surplus and consumer surplus.

Question

Quizplus · Accepted Answer

A decrease in the price of brownies will result in a decrease in producer surplus because producers will receive less revenue for each unit sold. This is because the supply curve is upward-sloping, meaning that as the price of brownies decreases, producers are willing to supply fewer units. There is no reason to believe that consumer surplus will increase in this scenario. Therefore, the correct choice is B.

Along the Upward-Sloping Supply Curve for Brownies,a Decrease in the Price