If MC's Hammers, a perfectly competitive firm, finds that its total revenue is $45, 000, its fixed cost is $20, 000, and its total cost is $50, 000, its producer surplus is

Question

Quizplus · Accepted Answer

MC's Hammers' producer surplus can be calculated as Total Revenue - Total Variable Cost. 
Total Variable Cost = Total Cost - Fixed Cost = $50,000 - $20,000 = $30,000 
Producer Surplus = Total Revenue - Total Variable Cost = $45,000 - $30,000 = $25,000

If MC's Hammers, a Perfectly Competitive Firm, Finds That Its