What is true about producer surplus?

Producer surplus is the amount a seller is paid for a good minus the seller's cost of providing it. The cost is the minimum price the seller would be willing to accept. Therefore, producer surplus measures the net benefit or profit that sellers receive from their participation in a market. It is a key concept in welfare economics used to analyze how market conditions and policies affect the economic well-being of producers.

A: Consumer surplus measures the well-being of consumers.

C: Producer surplus is total revenue minus the variable cost of production, not equal to total revenue itself.

D: Social welfare is measured by total surplus, which is the sum of both consumer and producer surplus.

1. Mankiw, N. G. (2021). Principles of Economics (9th ed.). Cengage Learning. Chapter 7, Section 7-2, "Producer Surplus," defines it as "the amount a seller is paid for a good minus the seller’s cost of providing it" and states it measures the benefit to sellers.

2. Pindyck, R. S., & Rubinfeld, D. L. (2018). Microeconomics (9th ed.). Pearson. Chapter 8, Section 8.6, "The Surplus of the Producer," explains that producer surplus is the benefit that producers enjoy by selling at the market price.