You pay $50 to buy a new pair of shoes. the shoes cost the producer $75 to make. this means that the producer is -losing money -earning a profit -just covering costs

The correct answer is A. Losing money

Explanation:

The final price of a product in most cases is the cost that implies producing the product plus some profit the producer or seller earns. However, in some cases, the price you pay for and the cost for producing the product is the same which means the seller or products is just covering costs. Besides this, in a few cases you pay less for the product than the cost of the production, this implies the producer is losing money because she or he is not even covering the costs of the product, and due to this there is neither a profit. Thus, in the case presented, the producer is losing money because the costs ($75) are lower than the price for customers ($50).

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