-The Figure Above Shows the Market for Milk

question 108

Multiple Choice

-The figure above shows the market for milk. If the efficient quantity of milk is produced, the producer surplus is

• A) $100.
• B) $400.
• C) $200.
• D) $600.

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Definitions:

Differential Cost

is the change in a company's cost of producing goods or services under two different action alternatives, essentially the cost difference between two choices.

Unused Capacity

The available but not utilized production ability of a company which could potentially generate revenue if employed.

Unit Cost

The cost incurred to produce, store, or acquire one unit of a product, calculated by dividing the total cost by the number of units.

Differential Cost

The difference in cost between two alternative decisions or scenarios.