In the Short Run, Producers Derive Surplus from Market Exchange

question 22

Multiple Choice

In the short run, producers derive surplus from market exchange because

• A)total revenue is greater than the minimum amount they would require to sell the good
• B)total revenue is equal to the minimum amount they would require to sell the good
• C)total revenue is less than the minimum amount they would require to sell the good
• D)marginal revenue equals average total cost
• E)they can rob consumers of most of their consumer surplus

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Definitions:

Elasticity of Demand

A measure of how sensitive the quantity demanded of a good is to a change in its price, indicating how consumers' purchasing decisions are affected by price changes.

Natural Gas

A fossil fuel used primarily for heating, electricity generation, and as a fuel for vehicles, consisting mainly of methane and found underground.

Price Increase

A rise in the cost of goods or services over a specific period of time, which can affect purchasing power and economic stability.

Substitutes

Substitutes are goods or services that can be used in place of each other, fulfilling the same needs or desires of the consumer.