Multiple Choice
Assume there are three bakeries, each willing to sell one dozen cupcakes in a given time period. The Sweet Treat can offer a dozen cupcakes for a minimum of $6. The Cake Corner can offer a dozen cupcakes for a minimum of $9. Pastry Place can offer a dozen cupcakes for a minimum of $13.If the market price of one dozen cupcakes increased from $7 to $10:
A) total surplus would decrease by $5.
B) Pastry Place's producer surplus would decrease by $3.
C) total surplus would increase by $4.
D) The Cake Corner's surplus would increase by $3.
Correct Answer:
Verified
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