Graph 7-3 -Refer to Graph 7-3. When the price falls from P₂ to P₁, which of the following is NOT true? A) the sellers who still sell the good are worse off because they now receive less B) some sellers leave the market because they are not willing to sell the good at the lower price C) the total cost of what is now sold by sellers is actually higher D) all of the above are correct

Question

Quizplus · Accepted Answer

The law of supply states that as price decreases, quantity supplied decreases. This means that at the lower price of P₁, the quantity supplied will be less than at the higher price of P₂. Therefore, it is unlikely that the total cost of what is sold by sellers will be higher at the lower price. Therefore, only option C is not true.

Graph 7-3 -Refer to Graph 7-3. When the Price Falls from P2

Graph 7-3 -Refer to Graph 7-3. When the Price Falls from P₂