If a Producer Is Willing to Receive at Least $5

question 47

Multiple Choice

If a producer is willing to receive at least $5 for a pen that she manufactures but she actually receives $7 for it. The producer surplus of the pen for that producer is

• A)$5.
• B)$2.
• C)$7.
• D)-$5.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.

Marginal Product

The additional output that is produced by adding one more unit of a specific input while holding all other inputs constant.

Market Wage

The prevailing wage rate paid for a specific job in the labor market, determined by the supply and demand for that type of labor.

Market Price

The going rate at which an asset or service can be acquired or disposed of in a certain market.