Producer surplus is the:
a) difference between the maximum price consumers are willing to pay and the minimum price producers are willing to accept.
b) difference between producers' revenues and opportunity costs of production.
c) opportunity cost of production.
d) area under the supply curve.
e) total amount paid for the good.
It is often seen that there is a difference between the price consumers and producers are willing to trade for and the price that they actually trade for. This constitute surplus in the market from production or consumption of goods.
Answer and Explanation: 1
The correct answer is:
B. The Difference between producer's revenues and opportunity costs of production.
Reason: Producer Surplus is the...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 3 / Lesson 61
Learn the producer surplus definition and understand how to calculate it with the producer surplus formula. See how a profit is made with a producer surplus example.