Figure 7-16 -Refer to Figure 7-16.Suppose the Price of the Good Is

question 64

Multiple Choice

Figure 7-16
-Refer to Figure 7-16.Suppose the price of the good is $400.Then,on the first unit of the good that is sold,producer surplus amounts to

• A)$200.
• B)$300.
• C)$400.
• D)$450.

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Definitions:

MC

Marginal Cost, which refers to the increase or decrease in the cost of producing one additional unit of a good or service.

ATC

stands for Average Total Cost, which is the sum of all production costs divided by the quantity of output produced; it combines average fixed and variable costs.

MR

Stands for Marginal Revenue, which is the additional income received from selling one more unit of a product or service.

Short Run

A time period in economics during which at least one input is fixed, limiting the ability of the economy or firm to adjust to changes in demand or supply.