Multiple Choice
Suppose that the equilibrium price in the market for widgets is $5. If a law increased the minimum legal price for widgets to $6, producer surplus
A) would necessarily increase even if the higher price resulted in a surplus of widgets.
B) would necessarily decrease because the higher price would create a surplus of widgets.
C) might increase or decrease.
D) would be unaffected.
Correct Answer:
Verified
Correct Answer:
Verified
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