In the long run, a firm's producer surplus is equal to the:
A) economic rent it enjoys from its scarce inputs.
B) revenue it earns in the long run.
C) positive economic profit it earns in the long run.
D) difference between total revenue and total variable costs.
E) difference between total revenue and total fixed costs.

Question

Quizplus · Accepted Answer

Producer surplus in the long run is equal to the economic rent from scarce inputs, as all other costs and normal profits are accounted for in competitive markets, leaving only the rent from unique, scarce resources as surplus.

In the Long Run, a Firm's Producer Surplus Is Equal