Table 5.3 -Refer to Table 5.3.The Table Above Lists the Marginal Cost

Multiple Choice

Table 5.3
-Refer to Table 5.3.The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specialises in producing fancy dress costumes.If the market price of The Waco Kid's cowboy hats is $40,

A) the Waco Kid will produce four hats.
B) producer surplus from the first hat is $40.
C) producer surplus will equal $28.
D) there will be a surplus; as a result, the price will fall to $24.