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 $17 to $12:
A. producer participation in the market would decrease.
B. total producer surplus would remain unchanged.
C. producer participation in the market would not be affected.
D. producer participation in the market would increase.
Answer: A
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A) first-come, first-served B) market price C) contest D) command
Falling interest rates can
A) raise the cost of buying new homes and fewer new homes will be purchased. B) lower the cost of buying new homes and fewer new homes will be purchased. C) raise the cost of borrowing for firms and decrease investment. D) increase a firm's stock price, which causes firms to issue more stock shares, and thus increases funds for investment.