ECONOMICS
MARKETS AND PRICES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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new workers to be hired
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producers to increase their price to the equilibrium price
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consumers to pay more for goods
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producers to lower their to the equilibrium price
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Detailed explanation-1: -A surplus exists when the price is above equilibrium, which encourages sellers to lower their prices to eliminate the surplus. A shortage will exist at any price below equilibrium, which leads to the price of the good increasing.
Detailed explanation-2: -As the equilibrium price decreases, producer surplus decreases. Shifts in the demand curve are directly related to producer surplus. If demand increases, producer surplus increases.
Detailed explanation-3: -A producer surplus occurs when goods are sold at a higher price than the lowest price the producer was willing to sell for.
Detailed explanation-4: -The total difference between the equilibrium price of the item and lower price producers are willing to accept is called the Producer Surplus at the equilibrium. This is also an area between two curves: the horizontal line y=P.