Producer Surplus

question 94

Multiple Choice

Producer surplus:

• A) is the difference between the maximum prices consumers are willing to pay for a product and the lower equilibrium price.
• B) rises as equilibrium price falls.
• C) is the difference between the minimum prices producers are willing to accept for a product and the higher equilibrium price.
• D) is the difference between the maximum prices consumers are willing to pay for a product and the minimum prices producers are willing to accept.

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Definitions:

Retail Inventory Method

The retail inventory method is an accounting technique used by retailers to estimate their inventory's ending balance/cost based on the relationship between the cost of merchandise and its retail price.