Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described, if the market price of hammers decreased from $15 to $10:
A. Bob's Hardware no longer sells hammers.
B. producer surplus for each producer falls by $5.
C. total producer surplus falls by $15.
D. total producer surplus falls by $5.
Answer: A
Economics
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