Producer surplus is: a. always equal to consumer surplus. b. the amount paid to sellers above...

Question

Question

Producer surplus is:

a.	always equal to consumer surplus.
b.	the amount paid to sellers above and beyond the required minimum to produce.
c.	the amount paid to sellers.
d.	the cost of production.
e.	the breakeven quantity.

Answer 1

Answer #1

Ans) Willingness to sell is the lowest amount that a seller is ready to accept in exchange for the product.

When seller is able to sell a product above his willingness to sell, he is benefitted. And this benefit is known as producer surplus.

Producer surplus = Price actually received - willingness to sell.

Option b.

Answer 2

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