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Producer surplus is shown graphically as the area under the demand curve and above the supply curve.
What is producer surplus?
Producer surplus is the difference between the least price a producer is willing to sell his good or service and the price of the good. The higher the price of the good, the higher producer surplus is.
Producer surplus = price of the good - least price the seller is willing to sell his good or service.
For example, the least price a seller is willing to sell a good is $1000. The price of the good is $2000. The producer surplus is $1000 (2000 - 1000).
The demand curve shows the relationship between price and quantity demanded. The supply curve shows the relationship between price and quantity supplied. The producer surplus is the area above the supply curve but the area below the demand curve.
To know more about producer surplus, please check: https://brainly.com/question/27204566
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