The difference between the value of a good to sellers and its price is known as:
A)consumer surplus.
B)producer surplus.
C)demand.
D)supply.

Question

The difference between the value of a good to sellers and its price is known as:​
A)​consumer surplus.
B)​producer surplus.
C)​demand.
D)​supply.

Quizplus · Accepted Answer

The difference between the value of a good to sellers (i.e. the price they are willing to sell it for) and the price it actually sells for is called Producer Surplus. This represents the benefit that producers receive from participating in a market, beyond the minimum amount needed to produce the good. Consumer Surplus (choice A) refers to the difference between the value a consumer places on a good and the price they actually pay for it. Demand (choice C) refers to the willingness and ability of consumers to purchase a good at various prices. Supply (choice D) refers to the willingness and ability of producers to produce and sell a good at various prices.

The Difference Between the Value of a Good to Sellers