If a Producer Is Willing to Receive at Least $5

question 47

Multiple Choice

If a producer is willing to receive at least $5 for a pen that she manufactures but she actually receives $7 for it. The producer surplus of the pen for that producer is

• A)$5.
• B)$2.
• C)$7.
• D)-$5.

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Definitions:

Standard Cost

A predetermined cost of manufacturing a product or providing a service, used as a benchmark to measure actual performance and efficiencies.

Widgets

Widgets are a generic term for small devices or gadgets, or can refer to hypothetical products used in economics or financial examples.

Nonfinancial Performance Measure

A performance measure expressed in units rather than dollars.

Normal Standard

A benchmark or baseline condition expected to be present in a set of data, processes, or operations.