… a core concept in Economic Analysis
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 http://www.mruniversity.com/node/179640, accessed 20 April 2016.
- 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 http://www.mruniversity.com/courses/principles-economics-microeconomics/supply-curve-producer-surplus-definition, accessed 20 April 2016.
Atlas topic and subject
Page created by: Ian Clark, last modified on 20 April 2016.
Image: Minute 6.03 of MRU Video, at http://www.mruniversity.com/courses/principles-economics-microeconomics/demand-curve-consumer-surplus-definition, accessed 20 April 2016.