In the Long Run, a Firm's Producer Surplus Is Equal

question 49

Multiple Choice

In the long run, a firm's producer surplus is equal to the:

• A) economic rent it enjoys from its scarce inputs.
• B) revenue it earns in the long run.
• C) positive economic profit it earns in the long run.
• D) difference between total revenue and total variable costs.
• E) difference between total revenue and total fixed costs.

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Definitions:

Job-Order Costing

An accounting method used to track the costs associated with producing a specific job or batch of products.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs related to utilities, depreciation, and salaries for management.

Adjusted Cost

Adjusted cost refers to the original cost of an asset after adjustments for improvements, depreciation, or amortization, directly affecting its value on the balance sheet.

Direct Materials

The cost of raw materials and components used directly in the production of goods.