Producer Surplus Is The

question 87

Multiple Choice

Producer surplus is the:

• A) difference between market price and the price at which firms would be willing to supply the product.
• B) surplus of revenue earned by suppliers over cost incurred to produce the goods.
• C) difference between what consumers are willing to pay and the price sellers are willing to sell at.
• D) excess of actual revenue over revenue that should be earned.

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Definitions:

Consumer Surplus

The gap between what a consumer is prepared to spend on a good or service and the price they actually end up paying.

Market Equilibrium

A condition or state in an economy where supply and demand are equal, leading to stable prices and quantities.

Units Bought

The quantity of a product that consumers purchase at a given price.

Tax Imposed

A financial charge or other levy instituted by a government on an individual or an entity to raise revenue for public purposes.