Question

Producer surplus is the difference between

Answer 1

The producer surplus is the difference between actual price (the amount that a seller is paid) minus intended price (price at which seller is ready to sell).

Producer's surplus =Actual price of the product —intended price of the product.

If a seller is willing to sell his product at $50 ,but he receives equilibrium price $80, his producer surplus =80—50 =$30

Normally actual price remains higher than the intended price to some output level.

Producer surplus is also described as the difference between total revenue (TR) and total cost (TC)

producer surplus =TR—TC