If a Firm Enjoys Producer Surplus in Perfectly Competitive Market

question 32

Multiple Choice

If a firm enjoys producer surplus in perfectly competitive Market A of $1000 and would enjoy producer surplus in perfectly competitive Market B of $1200,the firm would consider moving to Market B if

• A) fixed costs are greater than $100 in Market A.
• B) fixed costs are less than $200 in Market B.
• C) fixed costs are less than $300 but greater than $200 in Market B.
• D) fixed costs in Market B are less than the fixed costs in Market A plus $200.

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Definitions:

Banana Peel

Often used metaphorically to describe a potential hazard or slip-up that seems trivial but can lead to significant consequences.

Injured

The state of having received harm or damage, physically or legally, which may serve as a basis for seeking compensation or redress in a court of law.

Sued

The act of bringing a legal action against an individual or entity, seeking a legal remedy for damages or enforcement of rights.

Exculpatory Clause

A contract clause that frees one party from liability in the event of a wrongdoing or negligence.