If a seller's marginal cost is $25 and the price at which the good is sold is $15,the producer surplus is ________.
A) −$10
B) $10
C) $15
D) $25

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price at which the good is sold and the marginal cost of producing it. In this case, the price is $15 and the marginal cost is $25, so the producer surplus is -$10 (i.e. the seller is losing $10 for every unit sold). Therefore, the correct answer is A) −$10.

If a Seller's Marginal Cost Is $25 and the Price