Producer Surplus Refers To

question 54

Multiple Choice

Producer surplus refers to:

• A)The total amount producer spends for making the product
• B)The area under the demand curve above the equilibrium price
• C)The price the producer receives.
• D)The difference between producer's revenue from selling the product and the cost of producing it.

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Definitions:

Marginal Cost

The additional expense incurred when one more unit of a product or service is created.

Average Total Cost

The total cost divided by the quantity of output produced, representing the per-unit cost of production.

Economic Losses

Financial losses incurred by businesses or the economy as a whole, often as a result of unfavorable market conditions.