Question

Producer surplus is the difference between the amount that suppliers in the market are willing to...

Producer surplus is the difference between the amount that suppliers in the market are willing to sell goods for and

A) the marginal cost of producing each good
B) the total cost of producing those goods
C) the amount they actually receive for those goods D) the amount buyers wish to pay for those goods
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Homework Answers

Answer #1

Q-1 :: ANSWER :: (C) The Amount They Actually Receive For Those Goods

=> Explanation ::

Producer surplus Is the Difference Between the Amount Which Producer/Supplier Is Willing to Sell Goods For and The Amount Which The Seller Actually Get By Selling That Good to costumer. So Producer Surplus Shows The Benefit Of Producer That He Want To Earn From Its goods. it is Measure By The Price That Goods Sold minus The Production cost.

In The Graph The Area Below The Market Price And Above The supply curve is Called Production Surplus. So if demand Increase Producer Surplus Increase And If Demand Decrease Producer Surplus Also Decrease so It is Directly Related to The Demand Curve.

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