Answer to Question #89224 in Economics for Michael

Question

(A) kgomotso decided to start selling lemonade on her street. The other kids in the neighborhood noticed that kgomotso was making a lot of money selling lemonade. These kids decided to open their own lemonade stands. What will happen when they open their own lemonade stands?

1. The quantity of lemonade supplied will increase
2. The supply of lemonade will increase
3. The supply of lemonade will not be affected
4. The quantity of lemonade demanded will decrease

(B) If busani, a butcher, sells meat at a price exactly equal to the price he is willing to sell it for, then ...............

1. His producer surplus is R0
2. His willingness to sell is less than his producer surplus
3. His producer surplus is negative
4. He will never make a profit

Answer 1

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