Producer Surplus

Filed Under »
Dictionary Says

Definition of 'Producer Surplus'

An economic measure of the difference between the amount that a producer of a good receives and the minimum amount that he or she would be willing to accept for the good. The difference, or surplus amount, is the benefit that the producer receives for selling the good in the market.

Producer Surplus


This is shown graphically above as the area (Producer Surplus) above the producer's supply curve that it receives at the price point (P(i)). The size of this area increases as the price for the good increases.
Investopedia Says

Investopedia explains 'Producer Surplus'

For example, say a producer is willing to sell 500 widgets at $5 a piece and consumers are willing to purchase these widgets for $8 per widget. If the producer sells all of the widgets to consumers for $8, it will receive $4,000. To calculate the producer surplus, you subtract the amount the producer received by the amount it was willing to accept, (in this case $2,500), and you find a producer surplus of $1,500 ($4,000 - $2,500).
Search results for

'Producer Surplus'

  • CFA Level 1 Study Guide - Microeconomics - Market Efficiency ...

    http://www.investopedia.com/exam-guide/cfa-level-1/microeconomics/market-efficiency.asp
    Sign In• Register• Free Annual Reports • Free Newsletters. Dictionary;
    Investing; Markets; Personal Finance; Active Trading; Forex; ...

  • Macroeconomics: Microeconomics Foundation | Investopedia

    http://www.investopedia.com/university/macroeconomics/macroeconomics2.asp
    ... consumer surplus is calculated as the difference between the price a consumer is
    willing to pay and the actual price, while the producer surplus is the ...

  • CFA Level 1 Study Guide - Microeconomics - Effect of Taxes on ...

    http://www.investopedia.com/exam-guide/cfa-level-1/microeconomics/tax-effects.asp
    Sign In• Register• Free Annual Reports • Free Newsletters. Dictionary;
    Investing; Markets; Personal Finance; Active Trading; Forex; ...

  • Series 65 Study Guide - Basic Economic Concepts - Economic ...

    http://www.investopedia.com/exam-guide/series-65/economic-concepts/economic-indicators.asp
    ... Producer Price Index (PPI) -is a measure of the price of commercial items, such
    as farm ... Trade surplus - resultswhen a country's exports exceed its imports. ...

  • Investopedia Forex Outlook For April 2012 - Calendar of Events to ...

    http://www.investopedia.com/university/monthly-forex-report-April-2012/calendar.asp
    ... SEE: Predict Inflation With The Producer Price Index Italy: Consumer Price Index ...
    measure for forex traders to watch, with a trade surplus being favorable for ...

  • Introduction To Supply And Demand

    http://www.investopedia.com/articles/economics/11/intro-supply-demand.asp
    ... An underlying assumption of the theory lies in the producer taking on ... and demand
    curve to properly illustrate concepts like economic surplus, monetary policy ...

  • 4 Chinese Stocks With A Future

    http://stocks.investopedia.com/stock-analysis/2009/4-Chinese-Stocks-With-A-Future-NPD-CHL-FEED-CGA-SNP1020.aspx
    ... are a number of companies that stand to gain whether the surplus is in ... China is the
    world's largest pork producer and consumer, accounting for over 50% of ...

  • Economic Indicators: Trade Balance Report | Investopedia

    http://www.investopedia.com/university/releases/tradebalance.asp
    ... covers trade balances for services, such as financial and informational management,
    of which the US is currently a large exporter, creating a surplus in this ...

  • Investopedia's Forex Outlook For May 2012: Calendar of Events ...

    http://www.investopedia.com/university/monthly-forex-report-may-2012/calendar-of-forex-events.asp
    ... Great Britain Producer Price Index (May 11) Great Britain's Producer Price Index
    (PPI ... measure for forex traders to watch, with a trade surplus being favorable ...

  • Don't Ignore The Netherlands

    http://stocks.investopedia.com/stock-analysis/2010/Dont-Ignore-The-Netherlands-EWN-PHG-CNH-ING-AEG1202.aspx
    ... Before the global recession, the nation ran a slight budget surplus. ... natural gas
    deposits outside of Russia and is the third largest producer of natural gas ...

Related Articles

Partner Links