What is producer surplus? How is it measured?
What will be an ideal response?
Producer surplus is the excess of the amount received from the sale of a good or service over the cost of producing it. The producer surplus is measured as the area under the price and above the supply curve over the entire quantity sold.
You might also like to view...
Pick the true statement
A) It is possible for economic profit to be greater than accounting profit. B) Accounting profit includes both the implicit and explicit costs of production. C) Accounting profit is always greater than economic profit. D) None of the above is a true statement.
Which of the following is a possible result of price confusion?
A. People are less able to take actions that mitigate the impact of monetary policy. B. Sellers will face pressure to provide more accurate pricing information. C. The price system becomes a less effective way to coordinate economic action. D. The signals that prices send become clearer and more necessary.
A market's structure is described by
A) the number of firms in the market. B) the ease with which firms can enter and exit the market. C) the ability of firms to differentiate their product. D) All of the above.
Refer to the diagrams. The case of an inferior good is represented by figure:
A. A.
B. B.
C. C.
D. D.