A producer would have an added incentive to enter a market if the:
A. prices for microwave oven sharply
decreased.
B. price for tennis shoes sharply
increased
C. supply of apples increased,
causing a surplus
D. supply of cell phones satisfied
consumer demand
(I think it's either A or B)
One decreases prices; the other increases prices. Only one of these answers would entice an investor to this market.
Right.
r u sure?
I'm sure. But if you're in doubt, check your textbook.
To determine which answer choice represents an added incentive for a producer to enter a market, let's analyze each option:
A. prices for microwave oven sharply decreased: If the prices for microwave ovens sharply decrease, this may not necessarily provide an added incentive for a producer to enter the market. Lower prices may lead to reduced profit margins, which could discourage producers from entering the market.
B. price for tennis shoes sharply increased: If the price for tennis shoes sharply increases, this could create an added incentive for a producer to enter the market. Higher prices can potentially result in increased profits, making the market more attractive to producers.
C. supply of apples increased, causing a surplus: An increased supply of apples causing a surplus typically does not create an added incentive for a producer to enter the market. Surpluses can lead to lower prices due to excess supply, which may discourage producers from entering or expanding their operations.
D. supply of cell phones satisfied consumer demand: If the supply of cell phones already satisfies consumer demand, there may not be an added incentive for a producer to enter the market. If consumer demand is already adequately met, potential producers may not see an opportunity for significant profits.
Based on this analysis, the answer choice that represents an added incentive for a producer to enter a market is B. If the price for tennis shoes sharply increases, it can create the potential for higher profits, which could incentivize producers to enter the market.