Refer to Figure 9.2. At price 0H and quantity Q1, producer surplus is the area
A) 0ABQ1.
B) 0EDQ1.
C) AHB.
D) 0FGQ1.
E) none of the above
C
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If a good generates an external cost, the market will produce
a. some of the good but not enough b. too much of the good. c. an optimal amount of the good. d. none of the good.
aWanda sold her mother’s dining set to Mattie for $250. Later, Mattie told LaWanda that she would have paid her $300. What is the term for the fifty-dollar difference between what Mattie paid and what she was willing to pay?
a. market equilibrium b. consumer surplus c. producer surplus d. market subsidy
In a competitive industry with identical firms, long-run equilibrium is characterized by:
A. P > min ATC. B. MR = MC = min ATC. C. MR < P. D. P < AVC.
The main difference between the short run and the long run is that:
A. Firms earn zero profits in the long run B. The long run always refers to a time period of one year or longer C. In the short run, some inputs are fixed and some are variable D. In the long run, all inputs are fixed