Producer surplus is 0 A, O B. the market price multiplied by the number of units

Question

Producer surplus is 0 A, O B. the market price multiplied by the number of units sold by a firm. the difference between the lowest price a firm would be willing to accept and marginal cost. C. the difference between the highest price a consumer is willing to pay and the price the consumer actually pays. 0 D. the difference between the lowest price a firm would be willing to accept and the price it actually receives. 0 E, the difference between the highest price a consumer is willing to pay and the lowest price a firm would be willing to accept. How does producer surplus change as the equilibrium price of a good rises or falls? As the price of a good rises, producer surplus 1, and as the price of a good falls, producer surplus

Explanation / Answer

Solution:

Producer surplus is the difference between the lowest price a firm would be willing to accept and the price it actually receives

As the price of a good rises, producer surplus increases, and as the price of a good falls, producer surplus decreases

Explanation: Producer surplus can be defined as the excess of market price over the price at which the producer will be willing to sell a unit. Producer surplus is the additional private benefit to producers, as they earn more profit, than the minimum they would be prepared to supply for.

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