Producer Surplus Is

question 22

Multiple Choice

Producer surplus is

• A)represented on a graph by the area below the demand curve and above the supply curve.
• B)the amount a seller is paid minus the cost of production.
• C)also referred to as excess supply.
• D)All of the above are correct.

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Definitions:

Marginal Cost

The increase in cost resulting from the manufacture of one extra product or service unit.

Average Total Cost

The total cost of production divided by the quantity produced, including both fixed and variable costs.

Total Profit

The total income a business earns after subtracting all expenses, taxes, and costs associated with producing and selling its goods or services.

Monopoly Power

The ability of a single seller or company to control the market for a particular good or service, leading to limited competition.