Understanding Producer Surplus

This lesson explores Producer Surplus: the difference between the price a producer actually receives and the minimum price they are willing to accept. The graph shows a linear supply curve, P = 2Q, where Price sits on the vertical axis and Quantity on the horizontal axis.

The graph breaks down total producer surplus into the producer surplus for each unit. The amount of producer surplus for each unit is labeled directly on the graph, so you can see how it changes when the market price changes and how additional units may generate producer surplus.

How to Use the Playground

• Use the slider or +/− buttons (on mobile) to change the Price.
• Watch the Producer Surplus area change as the price changes.
• The Base and Height values are shown for reference and update automatically.
• Use the displayed Base and Height values to see how they determine the size of the producer surplus.