An increase in market demand has no effect on producer surplus because producer surplus is related to supply.

Question

Quizplus · Accepted Answer

Producer surplus is the amount that a seller receives in excess of the cost of production, and it is determined by the intersection of the supply and demand curves. An increase in market demand increases the equilibrium price and quantity, which in turn increases producer surplus as long as the increase in price is greater than the increase in cost of production. Therefore, an increase in market demand can have an effect on producer surplus.

An Increase in Market Demand Has No Effect on Producer