Final answer:
Producer surplus is the excess payment made by a seller for distinct goods or services purchased from its customer that exceeds the fair value of those goods or services.
Step-by-step explanation:
If a seller pays more for distinct goods or services purchased from its customer than the fair value of those goods or services, the excess payment is known as producer surplus. Producer surplus is the additional benefit that producers receive from selling a product at a higher price compared to the price they were willing to accept. It is calculated by subtracting the fair value from the actual payment made by the seller.
For example, if a seller pays $100 for a product that has a fair value of $80, the excess payment or producer surplus would be $20.