Total Surplus

question 60

Multiple Choice

Total surplus:

• A) is producer and consumer surplus combined.
• B) is producer surplus minus consumer surplus.
• C) is consumer surplus minus producer surplus.
• D) is the total amount spent on a good in a market.

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Definitions:

Gross Profit Rate

A financial metric that represents the proportion of money left over from revenues after accounting for the cost of goods sold.

Retail Inventory Method

An accounting technique for estimating inventory value by using a proportion between the retail price and cost of goods.

Cost Ratio

A measure that compares a company's operating expenses to its revenue, indicating how efficiently it is managed by showing the percentage of sales that goes towards covering costs.

Beginning Inventory

The value of a company's stock of goods at the start of an accounting period, serving as a baseline for inventory management.