What is producer surplus?
What will be an ideal response?
Producer surplus is the price of a good received minus the marginal cost of producing it, summed over the quantity sold.
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If Canada imposes a tariff on bananas and if none are grown in Canada, this tariff has
A) only revenue effects. B) only protective effects. C) both protective and revenue effects. D) neither protective nor revenue effects.
An Australian investor buys a U.S. Treasury bond that has a price of $10,000 . pays 5 percent interest, and matures in a year. Between the purchase date and the maturity date, the exchange rate changes from $1 = AUD 5.0 to $1= AUD 5.2 . What will be the Australian investor's rate of return from the U.S. bond?
a. 4 percent b. 7 percent c. 9.2 percent d. 12 percent e. 25 percent