Under What Conditions Will a Firm's Long-Run Producer Surplus Exceed

question 63

Multiple Choice

Under what conditions will a firm's long-run producer surplus exceed their economic rents?

• A) The firm requires land resources in the production process.
• B) The firm has access to specialized tools or technology that other firms do not own.
• C) The firm has access to knowledge or human capital that other firms do not own.
• D) The firm is operating in an imperfectly competitive market.

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Definitions:

Zero Marginal Cost

The situation where producing an additional unit of a good or service does not increase the total cost of production.

Fixed Cost

Expenses that do not change with the level of output produced, such as rent, salaries, and insurance premiums.

Patent

A legal grant by a government to an inventor, giving the right to exclude others from making, using, or selling an invention for a certain number of years.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance, remaining constant regardless of business activity volume.