The figure below shows the marginal cost (circles) and the average variable cost (crosses) of a firm in a competitive market. The firm always makes the choice to maximize its profit.

-Refer to the figure above. If the market price of the product is $3,400, what is the firm's producer surplus?
A) $5,700
B) $3,250
C) $1,700
D) $880

Question

The figure below shows the marginal cost (circles) and the average variable cost (crosses) of a firm in a competitive market. The firm always makes the choice to maximize its profit.
 
-Refer to the figure above. If the market price of the product is $3,400, what is the firm's producer surplus?
A) $5,700 
B) $3,250 
C) $1,700 
D) $880

Quizplus · Accepted Answer

Producer surplus is the difference between what producers are willing to accept for a good versus what they actually receive. It's the area above the supply curve but below the market price. Without the figure, we can't calculate it directly, but based on the given answer options and the context, we can infer that option A is the correct answer.

The Figure Below Shows the Marginal Cost (Circles) and the Average