The difference between the price a seller actually receives for a good and the seller's reservation price is:
A. consumer surplus.
B. variable cost.
C. producer surplus.
D. profit.
Answer: C
You might also like to view...
The antitrust law that prohibits price discrimination on grounds that it reduces competition is
A) the Federal Trade Commission Act. B) the Clayton Act. C) the Robinson-Patman Act. D) the Sherman Act.
Suppose the equilibrium price in a perfectly competitive industry is $10 and a firm in the industry charges $9 . Which of the following will happen?
a. The firm will not sell any output. b. The firm will sell less output than its competitors. c. The firm will make more profit than it could at the $10 price. d. The firm will make less profit than it could at the $10 price. e. The firm's revenue will increase and its costs may decrease.
Suppose the value of income elasticity of demand for a private college education is equal to 1.5 . This means that
a. every $1 increase in income provides an incentive for a $1.50 increase in expenditures on private college education b. every $1.50 increase in income provides an incentive for a $1 increase in expenditures on private college education c. a 10 percent increase in income causes a 15 percent increase in the quantity of private college education purchased d. a 15 percent increase in income causes a 10 percent increase in the quantity of private college education purchased e. a 10 percent decrease in private college tuition will have a large enough income effect to increase spending on private college education by 15 percent
The deadweight loss of an income tax is determined by the
a. amount of total tax revenue to the government. b. marginal tax rate. c. average tax rate. d. ability-to-pay principle.