Aggregate Surplus

question 51

Multiple Choice

Aggregate surplus:

• A) is minimized under perfect competition.
• B) is the difference between consumer and producer surpluses.
• C) is the sum of consumer and producer surpluses.
• D) will never be positive in the long run.

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Definitions:

Profit

The financial gain made in a transaction, calculated as the difference between the revenue received and the costs incurred.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity produced.

Output

Represents the total amount of goods and services produced by an economy over a specific period.

Average Variable Cost

The total variable costs (costs that change with the amount of output produced) divided by the quantity of output produced.