Asked by Sydney Morehouse on May 06, 2024
Verified
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.
Producer Surplus
The difference between the current market price and the cost of production for the firm.
Market Price
The current price at which a good or service can be bought or sold in the open market.
Costs Of Production
The total expenses incurred in producing goods or services, including raw materials, labor, and overheads.
- Comprehend the relationship between market price, costs of production, and producer surplus.
Verified Answer
BS
Basil SquidMay 10, 2024
Final Answer :
B
Explanation :
Producer surplus is the difference between the current market price and the full costs of production for the firm. It represents the additional benefit the producer receives for selling a product at the market price that is higher than the minimum price at which they would be willing to sell.
Learning Objectives
- Comprehend the relationship between market price, costs of production, and producer surplus.