Figure: Producer Surplus III

question 170

Essay

Figure: Producer Surplus III
(Figure: Producer Surplus III) Look at the figure Producer Surplus III.If the price of the good is $4, producer surplus will equal:
A.$20.
B.$40.
C.$60.
D.$80.

---

Definitions:

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving weight to some numbers more than others.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit.

Margin of Safety

The difference between actual or projected sales and the break-even point; it measures the amount by which sales can drop before reaching the break-even point.

Profit-Volume Chart

A graphical representation that shows the relationship between a firm's profits and its volume of sales.