Refer to Figure 9.7. Before the policy was implemented, producer surplus was

Because a firm has implicit costs as well as explicit costs

A) its accounting profit is always less than its economic profit. B) its economic profit is usually the same as its accounting profit. C) its economic profit is usually less than its accounting profit. D) its economic profit is usually more than its accounting profit.

If price = marginal cost at the output produced by a perfectly competitive firm and the firm is earning an economic profit, then

A) marginal revenue is less than price. B) price exceeds average total cost. C) total revenue equals total cost. D) average total cost is at a minimum.