A-LevelEconomicsThe price system and the microeconomy9708/12 · May/June 2021 · Q111 Mark
A private company achieves a producer surplus at the market equilibrium price. What might reduce the size of the private company’s producer surplus?
APrivate companies choose to prioritise profits over customer needs.
BPrivate companies start to pay dividends out of profits.
CThe government fixes the price of electricity below the market price.
DThe private company supply curve becomes more elastic.
✓ Correct answer
D: The private company supply curve becomes more elastic.
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