The actual amount paid by the lawn maintenance company to Bill for cut of lawns is an example of Producer surplus.
Producer surplus is the difference between the lowest price (that a firm would have been keen to accept) and the price it actually receives from the sale of a product.
A producer surplus is generated by market prices in excess of the lowest price producers would otherwise be willing to accept for their goods. This means that as the price increases, the incentive for producing more goods increases, thereby increasing the producer surplus.
Producer Surplus is an economic measurement. Total economic welfare is equal to the addition of consumer surplus and producer surplus.
Therefore, the above is an example of Producer surplus.
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