Producer surplus:
A) measures the value between the actual selling price of a product and the price at which sellers are willing to sell the product.
B) is illustrated by the area above the supply curve and below the market price.
C) is maximized in market equilibrium.
D) all of these.

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which sellers are willing to sell a product and the actual selling price. It is illustrated by the area above the supply curve and below the market price. Producer surplus is maximized in market equilibrium where the quantity demanded equals the quantity supplied, and there is no shortage or surplus. Therefore, all of the options A, B, and C are correct, making D the correct choice.

Producer Surplus