Producer surplus is defined as:

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price received by the producer and their reservation price, which is the lowest price at which they are willing to sell a particular quantity of a good or service. It measures the benefit that producers receive from selling a product, and is calculated as the area above the supply curve and below the equilibrium price. It does not take into account taxes or the consumer's reservation price, making options A, B, C, and E incorrect.

Producer Surplus Is Defined As