How does producer surplus change when the market price changes?When the market price rises, producer surplusPrice (dollars per pizza)201550As the price of pizza falls,the producer surplus frompizza decreases2Show Transcribed Text___and total cost of producing pizzaS=MCMarketprice68Pizzas (millions per day)A.B.Price (dollars per pizza)C.2010D.5increases; increasesAs the price of pizza rises,the producer surplus frompizza increasesdecreases; increasesShow Transcribed Text2decreases; decreasesOincreases; doesn't changeS=MCMarketprice68Pizzas (millions per day)

The producer surplus is the gap between the actual price a producer receives and minimum price a…

Answered: How does producer surplus change when…

How does producer surplus change when the market price changes? When the market price rises, producer surplus and total cost of producing pizza

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 3PA

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Question

How does producer surplus change when the market price changes?
When the market price rises, producer surplus
Price (dollars per pizza)
20
15
5
0
As the price of pizza falls,
the producer surplus from
pizza decreases
2
Show Transcribed Text
___and total cost of producing pizza
S=MC
Market
price
6
8
Pizzas (millions per day)
A.
B.
Price (dollars per pizza)
C.
20
10
D.
5
increases; increases
As the price of pizza rises,
the producer surplus from
pizza increases
decreases; increases
Show Transcribed Text
2
decreases; decreases
O
increases; doesn't change
S=MC
Market
price
6
8
Pizzas (millions per day)

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