Question

What is producer surplus?

1) The difference between the maximum prices producers are willing to sell a product for and the actual market price
2) The difference between the minimum prices producers are willing to sell a product for and the actual market price
3) The difference between the maximum prices consumers are willing to pay for a product and the actual market price
4) The difference between the minimum prices consumers are willing to pay for a product and the actual market price

Answer 1

Producer surplus is the difference between the price at which producers are willing to sell a product and the actual market price.

Step-by-step explanation:

Producer surplus is the difference between the price at which producers are willing to sell a product and the actual market price. It represents the extra benefit that producers receive from selling a good or service.

For example, if a producer is willing to sell a product for $10, but the market price is $8, then the producer surplus would be $2. This surplus is a measure of the producer's profit.

Option 1) The difference between the maximum prices producers are willing to sell a product for and the actual market price is the correct answer.