Introduction to Economics 1 Deneme Sınavı Sorusu #1263611
"Producer surplus.............."
Which of the following most appropriately completes the sentence above?
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increases with the market price increase and vice-versa |
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is the difference between the price at which a firm sells its product and the cost of production |
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is equal to the half of the base times height of the triangle |
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equals to the area below the demand curve and above the market equilibrium price |
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is the difference between the maximum amount a person is willing to pay for a good and the market price |
Producer surplus is the difference between the price at which a firm sells its product and the cost of production. There are gains from trade to producers/sellers also. The benefit the producers get from participating in the market activity is called producer surplus (PS). The production of goods and services requires firms to bring all factors of production together and convert inputs to output by taking the risk of production and bringing into the market. Hence, for the firms, the production of goods and services requires bearing costs.
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