Producer surplus is the sum of the profits earned by all firms in a market. Indicate whether the ...

Author Question: Producer surplus is the sum of the profits earned by all firms in a market. Indicate whether the ... (Read 54 times)

pepyto

Hero Member
Posts: 547

on: Jul 1, 2018

Producer surplus is the sum of the profits earned by all firms in a market.

Indicate whether the statement is true or false

Question 2

Changes in a firm's profit induce ________ in the producer surplus (PS).

A) identical changes
B) smaller changes
C) larger changes
D) no changes

Microeconomics ¦ Perloff ¦ 8^th Edition

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lorealeza77

Sr. Member
Posts: 356

Reply #1 on: Jul 1, 2018

Answer to Question 1

False. This definition ignores fixed costs. Producer surplus minus fixed costs equals profits.

Answer to Question 2

A

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