Given the scenario described, if the market price of hammers increased from $6 to $8:
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.
A. producer participation in the market would increase.
B. producer participation in the market would decrease.
C. producer participation in the market would remain unchanged.
D. total producer surplus would increase by $2.
A. producer participation in the market would increase.
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What does a successful protective tariff do?
(a) It forces foreign manufacturers to pay higher wages. (b) It re-enforces competition. (c) It creates an "economic rent" that goes to the competing domestic industries producing the taxed imported goods. (d) It mandates accelerated technological advance in the domestic economy.