Suppose There Are Four Firms That Are Each Willing to Sell

question 132

Multiple Choice

Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A, $6; Firm B, $7; Firm C, $10; and Firm D, $12. If the market price is $11 then the total producer surplus is

• A) $33.
• B) $11.
• C) $9.
• D) $10.

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Definitions:

Interpret

To explain or provide the meaning of something, often involving analysis of data or information to derive understanding or conclusions.

Years

A unit of time used in various financial calculations, such as the amortization of assets or the term of investments.

Retired

Indicates assets taken out of service or policies terminated.

Unamortized Discount

The portion of the bond discount that has not yet been expensed in the income statement over the bond's life.