Final answer:
Producer surplus is the difference between the minimum price producers are willing to accept for a product, based on their costs, and the higher market equilibrium price they actually receive. The correct answer, in this case, is option D, encapsulating this definition of producer surplus.
Step-by-step explanation:
The concept of producer surplus is key to understanding the efficiency and benefits realized by producers in a market. It represents the difference between the minimum price producers are willing to accept for a product — which typically reflects their costs — and the actual higher equilibrium price that they receive when they sell the product.
Regarding the options provided in the student's question:
- A. Incorrect as this describes consumer surplus, not producer surplus.
- B. Incorrect because producer surplus tends to increase as the equilibrium price rises, reflecting greater benefits to the producers.
- C. Incorrect as this again reflects an aspect of consumer surplus, not producer surplus.
- D. Correct as it describes the essence of producer surplus.
Therefore, the correct answer is option D, which states that producer surplus is the difference between the minimum price producers are willing to accept for a product and the higher equilibrium price.