Producer surplus for a business is:

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the market price and the marginal cost for each unit produced and sold by the business. It represents the additional revenue that a producer earns above and beyond the cost of production. Option A is incorrect because it includes profit, which is not part of producer surplus. Option B is incorrect because it only calculates revenue, not surplus. Option C is incorrect because it only adds up marginal costs, not the difference between price and marginal cost. Option D is the correct choice. Option E is incorrect because it includes fixed costs, which are not part of producer surplus.

Producer Surplus for a Business Is