Question

What can be expected if the market price of a product rises?/1 a. Consumer surplus will rise. b. Producer surplus will rise. c. Consumer surplus will remain constant. d. Producer surplus will remain c

Answer 1

b. Producer surplus will rise.

When the market price of a product rises, producers will be able to sell their product at a higher price, resulting in an increase in producer surplus. Producer surplus is the difference between the price producers are willing to accept and the market price they actually receive.