Bill is willing to cut lawns for a minimum of $200 a week. He is, however, paid $250 for the same service by a lawn maintenance company. This is an example of

Question

Quizplus · Accepted Answer

This is an example of producer surplus because Bill is receiving a higher price for his services than his minimum willingness to accept. The difference between the $250 he is paid and the $200 minimum he would have accepted is his producer surplus.

Bill Is Willing to Cut Lawns for a Minimum of $200