Question

Producer surplus is A. the market price multiplied by the number of units sold by a firm. B. the difference between the highest price a consumer is willing to pay and the lowest price a firm would be willing to accept. C. the difference between the lowest price a firm would be willing to accept and marginal cost. D. the difference between the lowest price a firm would be willing to accept and the price it actually receives. E. the difference between the highest price a consumer is willing to pay and the price the consumer actually pays. How does producer surplus change as the equilibrium price of a good rises or​ falls? As the price of a good​ rises, producer surplus ▼ decreases remains unchanged increases ​, and as the price of a good​ falls, producer surplus ▼ remains unchanged increases decreases .

Answer 1

Answer:

Producer surplus is

• D. the difference between the lowest price a firm would be willing to accept and the price it actually receives.

How does producer surplus change as the equilibrium price of a good rises or​ falls?

• As the price of a good​ rises, producer surplus increases​, and as the price of a good​ falls, producer surplus decreases.

Explanation:

Producer surplus refers to the difference between what a supplier or producer is willing and able to accept for their goods or services, and the actual price of those goods and services. If the supplier is willing to accept $2 per unit, but is able to sell them at $3 per unit, the supplier or producer surplus = $3 - $2 = $1