What is producer surplus?

Producer surplus is defined as the difference between what producers are willing to accept for a good or service and what they actually receive for it in the marketplace. This concept reflects the additional benefit or profit that producers gain from selling at a market price that exceeds their minimum acceptable price.

For instance, if a producer is willing to sell a product for $10 but is able to sell it for $15, the producer surplus is $5 per unit sold. This surplus serves as an incentive for producers to supply goods to the market, encouraging increased production when potential profits are higher than their costs.

The other options present different economic concepts that do not accurately define producer surplus. The actual profit made after all costs are deducted refers to net profit, while total revenue generated refers to the overall sales amount without considering costs. The surplus of unsold goods pertains to inventory, not to the extra value producers gain from market prices. Therefore, the definition of producer surplus aligns perfectly with the correct choice.