Producer surplus:A) is the difference between the maximum prices consumers are willing to pay for a product and the lower equilibrium price.B) rises as equilibrium price falls.C) is the difference between the minimum prices producers are willing to accept for a product and the higher equilibrium price.D) is the difference between the maximum prices consumers are willing to pay for a product and the minimum prices producers are willing to accept.

Question

Producer surplus:A)  is the difference between the maximum prices consumers are willing to pay for a product and the lower equilibrium price.B)  rises as equilibrium price falls.C)  is the difference between the minimum prices producers are willing to accept for a product and the higher equilibrium price.D)  is the difference between the maximum prices consumers are willing to pay for a product and the minimum prices producers are willing to accept.

Ynattirb Nosredna · Accepted Answer

Final Answer : C, Explanation :  Producer surplus is the difference between the minimum price producers are willing to accept for a product (essentially their cost) and the actual higher price they receive at equilibrium. This surplus represents the extra benefit producers receive from selling at a higher price than the minimum they were willing to accept.

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