When the price of a product exceeds the marginal cost of producing it,producers have a
A) consumer surplus.
B) producer surplus.
C) consumer shortage.
D) producer shortage.
E) deadweight surplus.

Question

Quizplus · Accepted Answer

When the price of a product exceeds the marginal cost of producing it, producers have a producer surplus. This is the difference between the market price and the cost of producing the good, and represents the additional profit that producers make due to the higher price. The other options are incorrect, as they do not accurately describe the situation.

When the Price of a Product Exceeds the Marginal Cost