Question

Which of the following is true when there is a
producer surplus?
A. The producer will downsize its factory.
B. The producer needs more technology in the factory.
C. The government must purchase the surplus.
D. The producer is below the market equilibrium price.

Answer 1

C is the correct answer I think

Answer 2

The true statement about producer surplus is D. The producer is below the market equilibrium price.

What is producer surplus?

Producer surplus is the total revenue that a producer receives from selling their goods minus the total cost of production.

Producer surplus is the difference between the market price and the seller's production cost.

With a producer surplus, the producer does not need:

• To downsize its factory
• More technology
• Government to purchase the surplus.

Thus, with a producer surplus, the production cost is below the market equilibrium price.

Learn more about producer surplus at https://brainly.com/question/15080185