Other things being equal, when the market price increases, the producer surplus
A)increases.
B)decreases.
C)remains the same.
D)increases and then decreases.
E)cannot be determined given the available information.

Question

Quizplus · Accepted Answer

When the market price increases, the producer can sell their output at a higher price, resulting in an increase in producer surplus. This is because the producer can now earn more profit per unit sold.

Other Things Being Equal, When the Market Price Increases, the Producer