- #1
Nikitin
- 734
- 27
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.
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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