What is meant by producer surplus?
What is meant by producer surplus? Key Takeaways. Producer surplus is the total amount that a producer benefits from producing and selling a quantity of a good at the market price. The total revenue that a producer receives from selling their goods minus the total cost of production equals the producer surplus. What is the new value of producer surplus? The new value created by the transactions, i.e. the net gain to society, is the area between the supply curve and the demand curve, that is, the sum of producer surplus and consumer surplus. This sum is called social surplus,...