PPSCFPSCNTSPakistan govt jobs
- Subject
- Surpluseconomics-mcqs › surplus
- Published
- 29 May 2019
- Last updated
- 28 May 2026
Which area represents the producer surplus on a supply and demand graph?
Multiple choice question for Surplus. Select an option, then review the explanation below.
Explanation
Producer surplus is typically illustrated as the area above the supply curve and below the price level. The given options are incorrect, and option D, which states it is above the demand curve and below the price, is also incorrect. The correct definition of producer surplus is the area above the supply curve and below the price.
More Surplus MCQs
Practice related questions from the same subject.
- 1.When a market produces an externality, how effective are free market solutions?
- 2.When a producer possesses market power and can affect the product's price, how do free market outcomes typically perform?
- 3.Assuming buyers act rationally and there is no market failure, what can be said about free market outcomes?
- 4.According to Adam Smith's concept of the invisible hand, what is the result of a competitive market equilibrium?
- 5.If a new bicycle is priced at Rs 300, Natalie values it at Rs 400, and the production cost for the seller is Rs 200, what is the total surplus when Natalie purchases the bicycle?