Question

As the market price of a service increases, more potential sellers will decide to perform that service because: higher prices lead to lower opportunity costs. more potential sellers will find that the market price exceeds their reservation price. higher prices result in higher revenue. it's more prestigious to produce high-priced services.

Answer 1

The correct choice from the given options is "more potential sellers will find that the market price exceeds their reservation price".

A seller will supply an extra unit of yield if the market cost is more prominent than or equivalent to the merchant's opportunity cost of creating an extra unit. In this way, as the market value rises, sellers that have higher opportunity costs will have more chances to enter the market.