Question

Producer surplus is the difference between a. the market price and the minimum price a buyer is willing to pay b. the market price and the minimum price a seller is willing to accept. c. the maximum price a seller is willing to accept and the market price. d. the maximum price a buyer is willing to pay and the market price

Answer 1

b. the market price and the minimum price a seller is willing to accept

Step-by-step explanation:

The formula to find out the producer surplus is shown below:

Producer surplus = Market price - minimum price to sell the goods

It shows a difference between the market price and the minimum price for accepting the price

Let us take an example, the market price is $10 and the minimum price for accepting the price is $5

So, the producer surplus equal to

= $10 - $5

= $5