QuestionSeptember 20, 2025

Producer surplus decreases as the price of a good decreases. True or False True False

Producer surplus decreases as the price of a good decreases. True or False True False
Producer surplus decreases as the price of a good decreases.
True or False
True
False

Solution
4.4(196 votes)

Answer

True Explanation 1. Define producer surplus Producer surplus is the difference between what producers are willing to accept and what they actually receive. 2. Analyze effect of price decrease As price decreases, the gap between market price and minimum acceptable price narrows, reducing producer surplus.

Explanation

1. Define producer surplus<br /> Producer surplus is the difference between what producers are willing to accept and what they actually receive.<br />2. Analyze effect of price decrease<br /> As price decreases, the gap between market price and minimum acceptable price narrows, reducing producer surplus.
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