36.3k views
4 votes
Total surplus is A. the total cost to sellers of providing the good minus the total value of the good to buyers. B. the difference between consumer surplus and sellers' cost. C. always smaller than producer surplus. D. the total value of the good to buyers minus the cost to sellers of providing the good.

User Jonette
by
4.9k points

1 Answer

7 votes

Answer:

The correct answer is option D.

Step-by-step explanation:

Total surplus is also known as economic surplus and is the sum of consumer surplus and producer surplus.

Consumer surplus can be defined as the difference between total amount the consumer is willing to pay and the price it has to pay actually.

Producer surplus can be described as the difference between the amount a supplier is willing to accept and the amount it actually gets.

The total surplus can be calculated through the total value of the good to buyers minus the cost to sellers of providing the good.

User Thanhma San
by
6.1k points