Live revision! Join us for our free exam revision livestreams Watch now


Producer surplus

The difference between what producers are willing and able to supply a good for and the price they actually receive. The level of producer surplus is shown by the area above the supply curve and below the current market price.

Producer surplus refers to the difference between the price at which a product or service is sold and the cost of producing it. It represents the additional profit that producers earn above and beyond their costs of production.

See also

© 2002-2024 Tutor2u Limited. Company Reg no: 04489574. VAT reg no 816865400.