Homework Answers
Answer
Option 3
producer surplus is eight zero or positive
Producer surplus is the area above marginal cost and below the
price
PS=0.5*(P-y axis intercept of the MC)*Q
the firm is making a loss and producing means the
AVC<P<ATC
so the P>y axis intercept of the MC and Q>0
so the PS is greater than zero in some cases it may be equal to
zero.
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