Producer surplus is the
A)area under the supply curve to the left of the amount sold.
B)amount a seller is paid minus the cost of production.
C)area between the supply and demand curves,above the equilibrium price.
D)cost to sellers of participating in a market.

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price received by the seller and the cost of production. In other words, it is the amount a seller is paid over and above the cost of producing the good. It is represented by the area above the supply curve but below the price received by the producer. Therefore, option B is the correct answer. The other options do not accurately describe producer surplus.

Producer Surplus Is the