The Difference Between the Lowest Price a Firm Would Have

question 32

Multiple Choice

The difference between the lowest price a firm would have been willing to accept and the price it actually receives from the sale of a product is called

• A)producer surplus.
• B)profit.
• C)marginal revenue.
• D)price differential.

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Definitions:

Equilibrium

A condition where the supply and demand in the market are equal, leading to stable prices.

Marginal Product

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

Value Of Marginal Product

describes the additional revenue generated from employing one more unit of input, such as labor or capital.

Wage Rate

The amount of compensation a worker receives per unit of time or per task performed, often expressed per hour or per piece.