(c) You have chosen incorrectly. This statement is true. Damages usually compensate for loss, and B's loss is the market value of his boat, which A has wrongfully converted.

If A had not converted the boat, B would still have a boat worth $10,000. The fact that A managed to sell the boat for $2,000 more than it was worth does not make a difference to how the courts will calculate B's loss.

B is only entitled to $10,000 as compensatory damages.