Producer surplus from a unit of output is the difference between the market pric

Question

Producer surplus from a unit of output is the difference between the market price and the seller's cost of producing that unit.

When positive externalities are present, it leads to an underallocation of resources in that area relative to that which is socially desirable.

If the price elasticity of demand coefficient equals 2, this means a 10 percent increase in price will result in a 20 percent decrease in the quantity demanded.

The principle of diminishing marginal returns says that as more and more units of a variable resource are added to a set of fixed resources, the resulting additions to output will become increasingly smaller and, eventually, larger.

The average fixed cost remains constant even in the long run.

Training and education typically are necessary to assist people harmed by creative destruction.

A cartel attempts to increase profits in the industry by limiting the production of each member.

Under conditions of perfect competition, AR always equals MR.

Economic profit always exceeds accounting profit.

Explanation / Answer

True

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