Figure 7-8 -Refer to Figure 7-8.If the Demand Curve Is D and Is

question 278

Multiple Choice

Figure 7-8
-Refer to Figure 7-8.If the demand curve is D and the supply curve shifts from S' to S,what is the change in producer surplus?

• A) Producer surplus increases by $625.
• B) Producer surplus increases by $1,875.
• C) Producer surplus decreases by $625.
• D) Producer surplus decreases by $1,875.

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Definitions:

Short Run

A period in economics during which the quantities of one or more production inputs cannot be changed, making some costs fixed.

Long Run

A period in economics during which all factors of production and costs are variable, allowing full adjustment to any change in the economic environment.

Break-Even Point

This is the point at which total revenues equal total costs, and the business or project makes neither a profit nor a loss.

Firm's Output

The quantity of goods or services produced by a firm within a given time period.