Mathematics of producer surplus wrong?


by Nikitin
Tags: mathematics, producer, surplus
Nikitin
Nikitin is offline
#1
May15-13, 01:32 PM
P: 588
The formula for producer surplus is:

Income - expenses = P*Q - ∫M(Q)dQ

However, shouldn't it be P*Q - (∫M(Q)dQ + FC), with FC= fixed costs?

I mean, the marginal costs are just the derivative of total costs, and thus integrating them is the same as just integrating the variable costs, ignoring the fixed costs of production.
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Nikitin
Nikitin is offline
#2
May15-13, 01:54 PM
P: 588
And concerning demand-curves:

Do they represent the quantity the market is willing to buy?


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