Producer surplus is the difference between

A) the maximum prices consumers are willing to pay for a product and the lower equilibrium price.
B) the quantity supplied and quantity demanded at an above equilibrium price.
C) the minimum prices producers are willing to accept for a product and the higher equilibrium price.
D) the maximum prices consumers are willing to pay for a product and the minimum prices producers are willing to accept.

Question

Cynthia Tapia · Accepted Answer

Final Answer : C, Explanation :  Producer surplus is the difference between the minimum price that producers are willing to accept for a product and the actual price they receive in the market, which is the equilibrium price. Therefore, choice C correctly identifies the definition of producer surplus. Choices A and D refer to consumer surplus and choice B refers to a situation where the market is not at equilibrium.

Definitions

Learning Objectives

Learning Objectives

Related questions