Producer Surplus
Producer surplus is the profit earned by suppliers from selling goods. It is the difference between the market price received and the minimum price producers are willing to accept (shown by the supply curve). It represents the net benefit to producers.
Real World
Saudi Aramco can extract oil for under $10 per barrel yet sells at world prices above $70, generating enormous producer surplus that funds Saudi Arabia's Vision 2030 diversification programme.
Exam Focus
Draw the producer surplus triangle accurately — above the supply curve and below the price line.
How well did you know this?