Watch this video, which explains consumer surplus using a graph to help
you grasp both the concept and the calculation. Complete the practice
questions to make sure you understand the calculation.
Practice Questions
All costs included, it costs your local restaurant $12 to serve you your favorite meal. You pay $21 for it. What is the producer surplus? *
$9
–$9
$33
–$33
What should we expect to happen if the producer surplus of a trade is negative? *
The producer gains no value from the trade.
The producer loses value from the trade.
The producer's gain from trade is the absolute value of the producer's surplus.
