Question

The marginal seller is the seller who

a. cannot compete with the other sellers in the market.
b. would leave the market first if the price were any lower.
c. can produce at the lowest cost.
d. has the largest producer surplus."

Answer 1

b. would leave the market first if the price were any lower.

Step-by-step explanation:

In the market, the producer always sells more than the economic cost ( raw materials and labor cost) that he bears during production. The marginal seller means that the seller earns zero economic profit ( producer surplus) i.e. an economic cost equals the selling price. So if the price falls then the marginal seller would leave the market first because he will be indifferent when earns the zero economic profit but when the price falls he would leave the market.