In economics, producer surplus is the difference between the price at which the producer actually sells a product and the minimum price the producer would have accepted for the product.  The surplus comes from the producer being able to sell its products at a higher market price than its minimum price.On a typical supply and demand curve, producer surplus is the area on the graph to the left of the supply curve and below the equilibrium price. Assume AAA Widgets is willing to sell 5,000 widgets at $7 each. If there are only 5,000 widgets available on the market, consumers are willing to pay $12 per widget.  Of course AAA Widgets is going to sell all 5,000 widgets at the $12 price, making an extra $5 profit per widget, for a total of $60,000.  The total amount they would have received had they sold at their accepted $7 price would have only been $35,000. AAA Widgets’ producer surplus is $25,000, which is the difference between what they received ($60,000) and what they would have accepted ($35,000).