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4 January, 02:06

Which of the following statements regarding producer surplus are not true? (Check all that apply. )

(A) It is the difference between total cost and total revenue.

(B) It arises from selling units at a price that is higher than the marginal cost.

(C) It is the area below the marginal cost curve.

(D) It is not possible to calculate the total producer surplus in the market.

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Answers (1)
  1. 4 January, 05:12
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    Answer: All except B

    Explanation: In simple words, producer surplus refers to the amount of benefit the producer is getting from participating in the market. It is the difference between the price the producers are willing to supply for and the price they actually receive.

    For individual sale, it is the difference between the marginal cost and the price is he is charging.

    Hence from the above we can conclude that the only correct option is B.
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Home » Business » Which of the following statements regarding producer surplus are not true? (Check all that apply. ) (A) It is the difference between total cost and total revenue. (B) It arises from selling units at a price that is higher than the marginal cost.
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