What is producer surplus? What does producer surplus measure?
What will be an ideal response?
Producer surplus is the difference between the lowest price a firm would be willing to accept for a good or service and the price it actually receives. Producer surplus measures the net benefit received by producers from participating in a market.
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The federal minimum wage law demonstrates
a. market equilibrium. b. a societal choice for economic equity over efficiency. c. the function of equilibrium price in a competitive market. d. government intervention to ensure the equilibrium price.
Suppose homebuyers believe that prices will fall over the next six months to a year. This would tend to
A) increase their demand for homes today. B) decrease their demand for homes six months from today. C) decrease their demand for homes today. D) have no effect on their demand today or six months from today.