Which of the Following Is True About Producer Surplus

question 32

Multiple Choice

Which of the following is true about producer surplus?

• A)A producer receives a surplus as some units of the good can be produced at a cost that is higher than the market price.
• B)Producer surplus is shown graphically as the area under the demand curve but above the supply curve.
• C)An increase in the market price due to an increase in demand will decrease producer surplus.
• D)Producer surplus is the difference between what a producer is paid for a good and the cost of producing that unit of the good.
• E)A decrease in the market price of a good due to a decrease in demand will increase producer surplus.

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