Strategic behavior is the result of an interdependent world

A perfectly competitive hardware manufacturer has total revenue of $85 million, total variable costs of $45 million, and fixed costs of $10 million. What is the firm's producer surplus?

A) $85 million B) $70 million C) $40 million D) $30 million

Jim is haggling with a car dealer on the price of a used car. During the bargaining, Jim discovers that the car has a significant number of scratches which he had not noticed before. The total surplus from the sale has

a. Increased b. Decreased c. Was not affected d. All of the above