What does producer surplus equal
A)value to buyers minus amount paid by buyers
B)amount received by sellers minus costs of sellers
C)amount received by sellers minus amount paid by buyers
D)value to buyers minus amount received by sellers

Question

Quizplus · Accepted Answer

Producer surplus is defined as the difference between the amount received by sellers (revenue) and the costs of sellers (production costs). Option A is the definition of consumer surplus, option C is the result of combining consumer and producer surplus, and option D is incorrect as it subtracts the seller's revenue from the buyer's value which is not a correct definition of producer surplus.

What Does Producer Surplus Equal