Which of the following is the definition of producer surplus?
A)the total revenue received by the producer for a good minus the total cost of producing that good
B)the price of a good minus the marginal cost of producing it,summed over the quantity produced
C)the revenue received for a good,minus the cost of producing it
D)the price of a good minus the cost of producing it
E)quantity produced in excess of the allocatively efficient amount

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price a producer receives for selling a good and the minimum price they would be willing to accept for that good. In other words, it is the area above the supply curve and below the market price. Therefore, the correct definition of producer surplus is B, which is the price of a good minus the marginal cost of producing it, summed over the quantity produced.

Which of the Following Is the Definition of Producer Surplus