Editing Economic surplus (section)

== Producer surplus ==
Producer surplus is the additional benefit that the owners of production factors and product providers bring to producers due to the differences between production, the supply price of the product, and the current market price. The difference between the amount actually obtained in a market transaction and the minimum amount it is willing to accept with the production factors or the products provided.

=== Calculation of producer surplus ===
Producer surplus is usually expressed by the area below the market price line and above the supply curve. In Figure 1, the shaded areas below the price line and above the supply curve between production zero and maximum output ''Q''<sub>1</sub> indicate producer surplus. Among them, OP<sub>1</sub>EQ<sub>1</sub> below the price line. This indicates that the total revenue is the minimum total payment actually accepted by the manufacturer. The area OP<sub>M</sub>EQ<sub>1</sub> below the S curve is the minimum total revenue that the manufacturer is willing to accept. In Figure 1, the area enclosed by the market price line, the manufacturer's supply line, and the coordinate axis is the producer surplus. Because the rectangle OP<sub>1</sub>EQ<sub>1</sub> is the total revenue actually obtained by the manufacturer, that is, ''A''&nbsp;+&nbsp;''B'', and the trapezoid OP<sub>M</sub>EQ. The minimum total profit that the manufacturer is willing to accept, that is, ''B'', so ''A'' is the producer surplus.

[[File:Producer Surplus graph made by Weiyi.png|thumb|Producer surplus]]

Obviously, the manufacturer produces and sells a certain quantity of ''Q''<sub>1</sub> goods at the market price ''P''<sub>1</sub>. The manufacturer has reduced the quantity of goods for ''Q''<sub>1</sub>, which means that the manufacturer has increased the production factors or production costs equivalent to the amount of AVC·''Q''<sub>1</sub>. However, at the same time, the manufacturer actually obtains a total income equivalent to the total market price ''P''<sub>1</sub>·''Q''<sub>1</sub>. Since AVC is always smaller than ''P''<sub>1</sub>, from the production and sales of goods in ''Q''<sub>1</sub>, manufacturers not only get sales revenue equivalent to variable costs, but also get additional revenue. This part of the excess income reflects the increase in the benefits obtained by the manufacturers through market exchange. Therefore, in economics, producer surplus is usually used to measure producer welfare and is an important part of social welfare.

Producer surplus is usually used to measure the economic welfare obtained by the manufacturer in the market supply. When the supply price is constant, the producer welfare depends on the market price. If the manufacturer can sell the product at the highest price, the welfare is the greatest. As part of social welfare, the size of the producer surplus depends on many factors. Generally speaking, when other factors remain constant, an increase in market price will increase producer surplus, and a decrease in supply price or marginal cost will also increase producer surplus. If there is a surplus of goods, that is, people can only sell part of the goods at market prices, and producer surplus will decrease.

Obviously, the sum of the producer surplus of all manufacturers in the market constitutes the producer surplus of the entire market. Graphically, it should be expressed as the area enclosed by the market supply curve, the market price line and the coordinate axis.