What is Producer Surplus? And, How to Find Producer Surplus On a Graph.

The producer price (Pp) represents the per-unit revenue (i.e., per-unit benefit) to the producer. As long as the Pp exceeds the marginal cost (MC) of supplying a good, suppliers will receive surplus (i.e., profit) for supplying that good.

When finding producer surplus, it is critical students understand the supply curve is based on the cost of supplying each additional good to the market (known as Marginal Cost).

This video is made for 1st year college students or AP/IB Economics students. It focuses on foundational economic concepts.