An Increase in Producer Surplus Would Most Likely Occur If

question 143

Multiple Choice

An increase in producer surplus would most likely occur if:

• A)an effective price floor was imposed.
• B)an effective price ceiling was imposed.
• C)the market price of the good decreased.
• D)no changes occurred in the market.

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Definitions:

Manufacturing Overhead Cost

The indirect costs associated with manufacturing, including expenses related to the operation of the factory like utilities and rent.

Conversion Cost

Direct labor cost plus manufacturing overhead cost.

Equivalent Unit

A measure used in cost accounting to express the amount of work done on a product in terms of fully completed units.

Weighted-Average Method

A process costing method that calculates unit costs by combining costs and outputs from the current and prior periods.