The producer surplus from a good is equal to the
A) maximum amount a consumer is willing to pay for the good minus the price that actually must be paid summed over the quantity sold.
B) actual price of the good minus the maximum amount a consumer is willing to pay for the good.
C) opportunity cost of producing the good minus its price summed over the quantity sold.
D) price of the good minus its opportunity cost of production summed over the quantity sold.
D
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Ben consumes soda and cheeseburgers. If his total utility from sodas is currently 40, and his total utility from cheeseburgers is 30, and the price of cheeseburgers is twice the price of sodas, a. Ben is in equilibrium
b. Ben should increase his soda consumption and decrease his cheeseburger consumption. c. Ben should decrease his soda consumption and increase his cheeseburger consumption. d. we cannot conclude that any of the above are correct.
Laissez-faire proponents contend that the government can serve a valuable role in encouraging firms to engage in research and development by creating a patent system
Indicate whether the statement is true or false
Which of the following about potential GDP is true?
a. During a recession, actual GDP will exceed potential GDP. b. Actual GDP cannot exceed potential GDP, even for short periods. c. Actual output may be either above or below potential output depending on how fully resources are utilized. d. The economy's potential output is the maximum output that could be achieved temporarily during a time of economic boom.
When will a profit-maximizing firm shut down?
a. when ATC x q is more than VC b. when ATC x q is less than VC c. when P x q is more than VC d. when P x q is less than VC