Producer Surplus
Definition
Producer surplus refers to the difference between what producers are willing to sell a good for and what they actually receive. It represents their economic gain from selling a product at a price higher than their minimum acceptable price.
Related terms
Consumer Surplus: Consumer surplus is similar to producer surplus but from the perspective of buyers. It represents their economic gain from purchasing a product at a price lower than their maximum acceptable price.
Market Equilibrium: Market equilibrium occurs when supply and demand intersect, resulting in an optimal balance between quantity supplied and quantity demanded.
Elasticity: Elasticity measures how responsive consumers or producers are to changes in prices or income.
"Producer Surplus" appears in:
Subjects (1)
AP Macroeconomics
Study guides (6)
AP Microeconomics - 2.6 Market Equilibrium and Consumer and Producer Surplus
AP Microeconomics - 2.7 Market Disequilibrium and Changes in Equilibrium
AP Microeconomics - 2.8 The Effects of Government Intervention in Markets
AP Microeconomics - 2.9 International Trade and Public Policy
AP Microeconomics - 3.6 Firms' Short-Run Decisions to Produce and Long-Run Decisions to Enter or Exit a Market
AP Microeconomics - 4.3 Price Discrimination
Additional resources (2)
AP Microeconomics - 2024 AP Microeconomics Exam Guide
AP Microeconomics - Unit 2 Overview: Supply and Demand
Practice Questions (5)
Producer surplus is the difference between?
Total producer surplus is calculated by?
Consumer and producer surplus are measures of?
What happens to a firm's producer surplus when the price is less than the variable cost in a perfectly competitive market?
What is the outcome for a firm's producer surplus when the price is above the variable cost in a perfectly competitive market?
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About Us
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Resources
Cram Mode
AP Score Calculators
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© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.