Producer surplus is defined as the difference between

Question

Quizplus · Accepted Answer

Producer surplus is defined as the difference between the market price and the supply curve. This represents the additional profit that producers receive above and beyond the minimum price they are willing to accept to produce a good or service. Choice A (the demand curve and the market price) is incorrect as this would represent consumer surplus. Choices C and D are incorrect as they involve price controls, which would create either a surplus or shortage in the market, resulting in a loss of producer surplus.

Producer Surplus Is Defined as the Difference Between