If the cost to download a song from the Internet falls from $0.99 to $0.50, then we would predict that producer surplus would in the market for MP₃ players.
A)increase
B)decrease
C)not change
D)We cannot determine what producer surplus will do without information about consumer surplus.

Question

Quizplus · Accepted Answer

When the cost to download a song falls, the demand for MP3 players increases, resulting in an increase in producer surplus. As a result, the producer will be able to charge a higher price due to the increase in demand for their product.

If the Cost to Download a Song from the Internet