Producer Surplus Calculator

Formula

To calculate the Producer Surplus (PS):

\[ PS = (MP - M) \times QS \]

Where:

$PS$ is the Producer Surplus in dollars
$MP$ is the Market Price in dollars
$M$ is the Minimum Price the producer would sell at in dollars
$QS$ is the Quantity Sold

What is Producer Surplus?

Producer Surplus is the amount of extra capital a producer earns from an increase in market price due to an increase in demand. It is the difference between what producers are willing to accept for a good or service versus what they actually receive.

Example Calculation

Let's assume the following values:

Market Price ($MP$) = $50
Minimum Price ($M$) = $30
Quantity Sold ($QS$) = 100 units

Using the formula:

\[ PS = (50 - 30) \times 100 = 20 \times 100 = 2000 \text{ dollars} \]

The Producer Surplus is $2000.