Knowing the cost of production,which decision will a seller mostly likely make
A)A seller would be eager to sell her product at a price higher than her cost and refuse to sell her product at a price equal to her cost.
B)A seller would refuse to sell her product at a price lower than her cost and willing to sell her product at a price equal to her cost.
C)A seller would be eager to sell her produce at a price higher than her cost and refuse to sell her product at a price lower than her cost.
D)A seller must be willing to sell her product at any price since sellers cannot set the price for their product.

Question

Quizplus · Accepted Answer

A seller's ultimate goal is to make a profit, and knowing the cost of production is crucial in making pricing decisions. If the cost of production is $X, then the seller would want to sell the product at a price higher than $X to make a profit. Thus, option C reflects the correct decision a seller would likely make. Option A is not entirely accurate since while the seller would want to sell the product at a higher price than her cost, she may still agree to sell it at cost or slightly lower in exceptional circumstances. Option B is incorrect because the seller would not want to sell the product at a price equal to or lower than the cost of production as no profit would be made. Option D is also incorrect as sellers can set the price for their goods.

Knowing the Cost of Production,which Decision Will a Seller Mostly