Use the following to answer question:
Figure: The Profit-Maximizing Output and Price
-(Figure: The Profit-Maximizing Output and Price)Use Figure: The Profit-Maximizing Output and Price.Assume that there are no fixed costs and AC = MC = $200.If this were a perfectly competitive industry,producer surplus would be:
A)$0.
B)$200.
C)$1,600.
D)$3,200.

Question

Use the following to answer question:
Figure: The Profit-Maximizing Output and Price 
-(Figure: The Profit-Maximizing Output and Price)Use Figure: The Profit-Maximizing Output and Price.Assume that there are no fixed costs and AC = MC = $200.If this were a perfectly competitive industry,producer surplus would be:
A)$0. 
B)$200. 
C)$1,600. 
D)$3,200.

Quizplus · Accepted Answer

In perfect competition, price equals marginal cost, so producer surplus is zero.

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