Producer surplus is defined as?

Producer surplus is correctly identified as the difference between the amount a seller is paid for a good or service and the cost of providing that good or service. It essentially measures the financial benefit that producers receive from selling at a market price that is higher than their minimum acceptable price, which is often based on their costs of production.

This concept highlights the additional benefit that producers gain, in terms of economic welfare, when they sell goods at prices above their cost. For instance, if a producer incurs a cost of $10 to produce a good but sells it for $15, the producer surplus is $5. This surplus reflects the profitability and incentive for producers to continue creating goods and services in the marketplace.

The other options do not accurately encompass the definition. Total revenue from sales reflects overall income without accounting for costs. Profit margin per sale is a narrower concept that deals specifically with profit after costs are deducted. The cost of production strictly refers to the expenses incurred in making a product, devoid of any consideration of the revenue earned from sales. Thus, the definition focusing on the difference between payment received and costs incurred correctly encapsulates the essence of producer surplus.