What is the best definition of producer surplus?
Understand the Problem
The question is asking for the best definition of the economic concept of producer surplus, which relates to the difference between what producers are willing to accept for a good or service and what they actually receive.
Answer
The difference between the amount at which a producer is willing to sell goods and the actual amount received.
The best definition of producer surplus is the difference between the amount at which a producer is willing to sell goods and the actual amount they receive for selling those goods.
Answer for screen readers
The best definition of producer surplus is the difference between the amount at which a producer is willing to sell goods and the actual amount they receive for selling those goods.
More Information
Producer surplus measures the benefit to producers for selling at a market price higher than the minimum they would be willing to accept.
Tips
A common mistake is to confuse producer surplus with profit. Producer surplus does not account for fixed costs of production.
Sources
- What is Producer Surplus? Definition of ... - The Economic Times - economictimes.indiatimes.com
- Producer surplus definition (how to calculate with example) - Indeed - uk.indeed.com
- Producer Surplus Overview, Formula & Example - Lesson - Study.com - study.com
