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

Question

Quizplus · Accepted Answer

Producer surplus is the difference between total revenue and total variable costs. 
Producer surplus = Total Revenue - Total Variable Costs 
Producer surplus = $85 million - $45 million 
Producer surplus = $40 million

A Perfectly Competitive Hardware Manufacturer Has Total Revenue of $85