Question

Which of the following statements is true about the changes that occur after the supermarkets merge? a. total surplus rises.

b. the market price increases. c. producer surplus rises. d. the market quantity remains unchanged. e. consumer surplus remains unchanged.

Answer 1

After supermarkets merge, total surplus rises.

Step-by-step explanation:

After supermarkets merge, the following statement is true: a. total surplus rises. Total surplus includes both consumer surplus and producer surplus. When supermarkets merge, it can lead to increased efficiency and economies of scale, which can result in lower costs and higher profits for producers. As a result, total surplus in the market increases.

Answer 2

The statement that is true about the changes that occur after the supermarkets merge is b, c, and e

The impact of a supermarket merger on total surplus, market price, producer surplus, market quantity, and consumer surplus can vary depending on the specific details of the merger and the market conditions.

The market price may increase as a result of reduced competition and increased market power for the merged supermarkets. Producer surplus may rise as the merged supermarkets may have more control over pricing and may benefit from increased market share.