Which of the following is true?
i.Marginal cost is measured by the maximum price that consumers are willing to pay for another unit of a good or service.
ii.Producer surplus equals marginal benefit minus price,summed over the quantity produced.
iii.A supply curve is a marginal cost curve.
A) only iii
B) only i
C) only ii
D) i and ii
E) i and iii

Question

Quizplus · Accepted Answer

iii. A supply curve is indeed a marginal cost curve, reflecting the lowest price at which a producer is willing to supply an additional unit. i is incorrect because marginal cost is the cost to produce one more unit of a good, not the maximum price consumers are willing to pay. ii is incorrect because producer surplus is actually the difference between the market price and the marginal cost of production, summed over the quantity produced.

Which of the Following Is True