![Economics 101: Producer Surplus](https://i0.wp.com/sterlingterrell.net/wp-content/uploads/2016/10/1-27.jpg?fit=638%2C422&ssl=1)
[This is part of the series: The Complete Guide To Economics 101.]
In the field of economics, what is producer surplus?
Producer Surplus is the difference between what a producer is paid, and what a producer was willing to take for a particular good or service.
For instance:
- A car company might be willing to take $30,000 for producing and selling a new car. But the car sells for $35,000. Producer surplus = $5,000.
- A cotton farmer might be willing to take $.65 per pound for his cotton harvest. But he sells it for $.75 per pound. Producer surplus = $.10 per pound.
- And I might be willing to take $2.00 for a used book. But that does not keep me from selling the book for $17.00.