Firm a is a new producer in the market for good x, which is characterized by linear demand and supply curves. initially, to attract customers, the firm prices its product low at $8 per unit. while the firm sells 1,000 units of the product at this price, there is a shortage in the market. this shortage can be cleared if price is increased to $10 per unit. the quantity demanded and supplied at this higher price will be 1,500 units.

Question

Jolee

Business

16 January, 07:08

Firm a is a new producer in the market for good x, which is characterized by linear demand and supply curves. initially, to attract customers, the firm prices its product low at $8 per unit. while the firm sells 1,000 units of the product at this price, there is a shortage in the market. this shortage can be cleared if price is increased to $10 per unit. the quantity demanded and supplied at this higher price will be 1,500 units.

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Anne Gill · Answer 1

I believe the information above is best supported by; the fact that producer surplus will increase if the price rises from $ 8 per unit to $10. This is due to the fact that there is a shortage in the market therefore demand will increase, this results to customers wanting to buy at a higher price than the initial cost, to satisfy their demand and need