Producer Surplus Is the

question 414

Multiple Choice

Producer surplus is the

• A) cost of the good summed over the quantity sold.
• B) demand for a good minus the supply summed over the quantity sold.
• C) price of a good minus the marginal cost of producing it summed over the quantity sold.
• D) marginal cost of producing it summed over the quantity sold.

---

Definitions:

Total Cost

The total expense of production encompassing both constant and fluctuating costs.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced.

Total Variable Cost

The sum of expenses that vary directly with the level of production or sales volume.

Variable Costs

Costs that change in proportion to the level of activity or volume of production.