Question

at what point described below will producer surplus most likely drop to zero for a firm? a.) when the firm is taking a significant loss b.) when revenue equals opportunity and variable costs c.) when producer and consumer surplus are both the same quantity d.) when the firm is making a significant profit

Answer 1

(B) When revenue equals opportunity and variable cost, then the producer surplus most likely drops to zero for a firm.

What is revenue?

• The total income derived from the sale of products or services pertaining to a business's core operations is referred to as revenue.
• Because it appears at the top of the income statement, revenue, which is also known as gross sales, is frequently referred to as the "top line."
• A company's overall earnings or profit are referred to as income or net income.
• Although both revenue and profit are positive indicators for your company, they are not the same thing.
• The producer surplus for a firm will probably reach zero when revenue equals opportunity costs and variable costs.

Therefore, (B) when revenue equals opportunity and variable cost, then the producer surplus most likely drops to zero for a firm.

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