Producers' surplus is
A) the difference between the price a buyer pays for a good and the highest price he would have paid for the good.
B) the difference between the price a seller receives for a good and the minimum price for which he would have sold the good.
C) the difference between the price a seller receives for a good and the price a buyer pays for the good.
D) equal to price times quantity sold.
E) equal to the seller's minimum price and the buyer's maximum price.

Question

Quizplus · Accepted Answer

Producers' surplus is the difference between the price a seller receives for a good and the minimum price for which he would have sold the good. This represents the producer's gain from selling the good at a higher price than they were willing to sell it for. Option A describes consumer surplus, while option C describes the difference between the price paid and received. Option D represents revenue, while option E is not an accurate definition of producers' surplus.

Producers' Surplus Is