Producer Surplus

 … a core concept in Economic Analysis

Click for video, minute 1:40

Click for video, minute 1:40

Concept description

Producer surplus is the producer’s gain from exchange – the difference between the market price and the minimum price at which producers would be willing to sell a given quantity. (See Alex Tabarrok, reference below and video to right.)

The total producer surplus is the sum of the producer surplus of all sellers.

MRU practice questions

See, accessed 20 April 2016.

  1. Michael is an economist. He loves being an economist so much that he would do it for a living even if he only earned $30,000 per year. Instead, he earns $80,000 per year. (Note: This is the average salary of new economists with a Ph.D. degree.) How much producer surplus does Michael enjoy?


Alex Tabarrok, A Deeper Look at the Supply Curve, Marginal Revolution University, at, accessed 20 April 2016.

Atlas topic and subject

Supply, Demand, and Equilibrium (core topic) in Economic Analysis.

Page created by: Ian Clark, last modified on 20 April 2016.

Image: Minute 6.03 of MRU Video, at, accessed 20 April 2016.