Producer surplus is the difference between what producers are willing to accept for a good or service and the actual price they receive. It represents the extra benefit producers gain when they sell at a market price higher than their minimum acceptable price. This surplus encourages producers to supply more goods, as they can earn additional profit. In a competitive market, producer surplus can be visualized on a supply and demand graph. The area above the supply curve and below the market price indicates the total surplus. This concept helps economists understand how changes in market conditions affect producer incentives and overall economic welfare.