Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will a. decrease, and pro
ducer surplus in the industry will decrease. b. increase, and producer surplus in the industry will increase. c. decrease, and producer surplus in the industry will increase. d. increase, and producer surplus in the industry will decrease.
1 answer:
Answer:
b. increase, and producer surplus in the industry will increase
Explanation:
A normal good is a good whose demand increases as income increases.
If grass seed is a normal good, when income rises, demand increases and the demand curve shifts to the right. This would lead to an increase of demand over supply which would lead to a rise in price.
The rise in price increases producers surplus.
Producers surplus is the least price a producer is willing to sell a product and the actual price the product is sold. If price rises, producer surplus increases.
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Answer:
attached below
Explanation:
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<u>A) using AD-AS to depict the situation </u>
attached below is the graph
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x-axis <em>= </em>real GDP , Y-axis = price level,
AD = aggregate demand curve , S = short run aggregate supply curve
L = long run aggregate supply curve,
B) In the long run the<em> graph </em>will adjust to the full employment level
attached below is the graph
Answer:
$527,615.08
Explanation:
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