Prodcer Surplus : A Introduction

Producer surplus measures the benefit received by a producer and seller above and beyond the minimum amount the seller would provide the good for. Graphically, it is the distance between the supply function and the market price. In the graph at left; the seller would willingly sell the 10'th unit for less than the market price. For the 51'st unit, however, the seller will not sell becasue the amount the seller is willing to receive for the 51'st unit (shown by the height of the supply curve) is greater than the market price.

To return to the producer and consumer surplus page for ECON 504 in Prometheus plesae re-activate that window. As another alternative you can view the add-in page created for this course explaining consumer surplus. To visit the add in page created for coumsumer surplus please click the UB link at left. Alterhatively, ou can close this window if you like.