Total surplus is
A) equal to producer surplus plus consumer surplus.
B) equal to the total cost to sellers minus the total value to buyers.
C) equal to consumers' willingness to pay plus producers' cost.
D) greater than the sum of consumer surplus plus producer surplus.

Question

Quizplus · Accepted Answer

Total surplus is the total value that consumers receive from a good or service, minus the total cost of producing it. Consumer surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay. Producer surplus is the difference between the price that a producer receives for a good or service and the cost of producing it. Therefore, total surplus is equal to the sum of consumer surplus and producer surplus, as it represents the total gain from trade in a market.

Total Surplus Is