what-is-the-effect-of-a-decrease-in-market-price-on-producer-surplus-and-market-

Question

What is the effect of a decrease in market price on producer surplus and market supply?

Accepted Answer

Producer surplus decreases and market supply decreases as fewer producers are willing to sell.

Answer

Producer surplus decreases but market supply increases.

Answer

Producer surplus remains constant and market supply remains unchanged.

Answer

Producer surplus increases and market supply increases as more producers enter the market.