Producer Surplus Is

question 86

Multiple Choice

Producer surplus is

• A) the difference between the maximum a person is willing to pay and current market price.
• B) the difference between current market price and full costs of production for the firm.
• C) the difference between willingness to sell and full costs of productions for the firm.
• D) current market price.

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Definitions:

Total Utility

The complete satisfaction or benefit a consumer receives from consuming a certain amount of goods or services.

Diminishing Marginal Utility

A common economic concept stating that as a person consumes more of a product, the satisfaction (utility) gained from each additional unit decreases.

Total Utility

It is the total satisfaction or benefit that a consumer derives from consuming a certain quantity of goods or services.

Additional Units

Refers to extra quantities or increments of a product or service that are made available or consumed.