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Producer surplus can be thought of as the _____ that trade creates for producers in a market.

User Tteguayco
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Final answer:

Producer surplus is the extra benefit that producers receive from selling a good or service, which is the income producers get above the cost of production. It can be thought of as the extra benefit or profit that trade creates for producers in a market.

Step-by-step explanation:

Producer surplus is the extra benefit that producers receive from selling a good or service. It is the income producers get above the cost of production. In terms of the supply curve, producer surplus is represented by the area between the market price and the segment of the supply curve below the equilibrium.

For example, if the equilibrium price of a product is $80, but producers were willing to supply the product at $45, the producer surplus would be the difference between the actual price received ($80) and the price they were willing to accept ($45).

Therefore, producer surplus can be thought of as the extra benefit or profit that trade creates for producers in a market.

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