If the price is greater than the marginal cost of producing a good, the seller has
A) a loss.
B) no benefit from the sale.
C) some producer surplus from the sale.
D) some negative consumer surplus from the sale.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

If the price is greater than the marginal cost of producing a good, the seller has some producer surplus from the sale. This is the difference between the price the seller receives and the cost of production, and represents the additional profit that the seller gains from producing and selling the good. A and B are incorrect as the seller in this case is not experiencing a loss or no benefit. D is incorrect as negative consumer surplus would not be present in this scenario.

If the Price Is Greater Than the Marginal Cost of Producing