Figure4-8Producer Surplus Here is the supply curve for wheat. At a price of $5 per bushel, farmers supply 1 million bushels. The producer surplus at this price is equal to the shaded area: the area above the supply curve but below the price. This is the total gain to producers— e—
All other things equal, a shift in the supply curve will lead to a change in the producer surplus. For example, after an increase in the supply of wheat (i.e., a rightward shift of the supply curve), the producer surplus increases.
All other things equal, a shift in the supply curve will lead to a change in the producer surplus. For example, after an increase in the supply of wheat (i.e., a rightward shift of the supply curve), the producer surplus increases.