Producer Surplus Is

question 97

Multiple Choice

Producer surplus is

• A)the difference between the maximum price consumers are willing to pay and the minimum price producers are willing to accept.
• B)the excess of the amount received from the sale of a good or service over the cost of producing it.
• C)equal to the marginal cost of production.
• D)equal to the area under the supply curve.
• E)the total amount paid for the good.

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Definitions:

Machine-Hours

An evaluation of manufacturing productivity or action determined by how long equipment is running.

Total Job Cost

The total expense attributed to producing a specific job, including materials, labor, and overhead costs.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to individual units of production based on a chosen activity base.

Machine-Hours

A measure of production volume or activity based on the number of hours machines are operated in the manufacturing process.