Question

Producer surplus measures theA. benefits to sellers of participating in a market.B. costs to sellers of participating in a market.C. price that buyers are willing to pay for sellers’ output of a good or service.D. benefit to sellers of producing a greater quantity of a good or service than buyers demand.

Answer 1

Answer: Option (A) is correct.

Explanation:

Producer surplus measures the benefits of the sellers or producers. producer surplus is the difference between the cost of production and the price paid by the consumer for a good or we can say price receive by the seller. Graphically, it is the area above the supply curve and under the equilibrium price that is paid by the consumer.