Markets work because they allocate sales to the potential sellers who most value the right to sell a good, as indicated by their ability to produce the good at the lowest cost. This statement illustrates:
A) producer surplus.
B) consumer surplus.
C) total surplus.
D) deadweight loss.

Question

Quizplus · Accepted Answer

This statement illustrates producer surplus, which is the difference between what producers are willing to accept for a good and what they actually receive. It reflects the benefit to sellers who can produce at lower costs and thus value the right to sell more.

Markets Work Because They Allocate Sales to the Potential Sellers