A consumer values a car at $20,000 and it costs a producer $15,000 to make the same

Question:

A consumer values a car at $20,000 and it costs a producer $15,000 to make the same car. If the transaction is completed at $18,000, the transaction will generate

a. No surplus.

b. $5,000 worth of seller surplus and unknown amount of buyer surplus.

c. $2,000 worth of buyer surplus and $3,000 of seller surplus.

d. $3,000 worth of buyer surplus and unknown amount of seller surplus

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Managerial Economics

ISBN: 9781337106665

5th Edition

Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward

See More Books

Question Posted: Jul 08, 2020 02:36 AM

See More Questions

A consumer values a car at $525,000 and a seller values the same car at $485,000. If sales tax is 8% and is levied on the seller, then the sellers bottom-line price is (rounded to the nearest...
Multiple-Choice Questions 1. An individual's value for a good or service is the a. The amount of money he or she used to pay for a good. b. The amount of money he or she is willing to pay for it. c....
If a firms sales are $1,500,000 and it costs 9 percent to carry current as-sets, what is the potential savings if management can increase inventory turnover from 3 to 4 times a year and increase...
Resolve the force F1 into components acting along the u and v axes and determine the magnitudes of the components. Given: F1 = 250 N F2 = 150 N θ1 = 30 deg θ2 = 30 deg θ3 = 105 deg...
Which of these compounds can be a member of an isomer pair? In each case where isomerism is possible, identify the type or types of isomerism. [Sections 24.2, 24.4] CH2 C C-OH --O NHE Cl (b) CH3CH2CH...
Review the Microsoft Windows 10 Hardening GUidelines https://www.microsoft.com/security/blog/2019/04/11/introducing-the-security-configuration-framework-a-prioritized-guide-to-hardening-windows-10/...
What are the key factors behind a successful report presentation?
During the current year, Garrison Construction ttaded in two relatively new small cranes (cranes no. 6RTand S79) for a larger crane that Garrison expects will be more useful for the particular...
Why is it important for managers to identify the marketing objective before beginning their analysis and before making decisions? Give a short example (real or hypothetical) to illustrate your point....
Sayaka Tar and Gravel Ltd. operates a road construction business. In its first year of operations, the company obtained a contract to construct a road for the municipality of Cochrane West, and it is...
Taxes a. Impede the movement of assets to higher-valued uses. b. Reduce incentives to work. c. Decrease the number of wealth-creating transactions. d. All of the above.
Voluntary transactions a. Always produce gains for both parties. b. Produce gains for at least one party. c. Always increase wealth for everyone. d. Are inefficient.
Mininova Corporation is preparing earnings per share data for 2012. The net income for the year ended December 31, 2012, was $400,000 and there were 60,000 common shares outstanding during the entire...
G Rettkowicz commenced business from 1 August 2022 with bank $9000, inventory $2000, motor vehicle $8000, computer $2800; process this data through the general journal and post to the general ledger....
Briefly explain how a business verifies that its EFTPOS and credit card sales have been correctly credited by the bank to the business bank account.
On 1 February 2022, the bank account in the general ledger of M Hope was $600 debit. During the month there were receipts of $850 and payments of $1300. M Hope received the bank statement for the...
R Dartmouth received the bank statement for November 2022, which had a credit balance of $90. The general ledger bank account balance at 1 November 2022 was $50 debit. Receipts for the month totalled...
Prepare as a general journal the commencement of a petty cash imprest float of $500.00. In the balance sheet, what is the classification of the accounts affected by the establishment of the petty...
The accounting records of Oriental Rugs show these data (in thousands). As the auditor, you discovered that the ending inventory for 2015 was overstated by $100,000 and that the ending inventory for...
Design a circuit which negative the content of any register and store it in the same register.
You are the manager of an organization in America that distributes blood to hospitals in all 50 states and the District of Columbia. Arecent report indicates that nearly 50 Americans contract HIV...
As a result of increased tensions in the Middle East, oil production is down by 1.21 million barrels per daya 5 percent reduction in the worlds supply of crude oil. Explain the likely impact of this...
You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over $15 million on related paperwork and...
A 1 kg metal block is heated to 200 C and then dropped into a thermally isolated container with 4 kg of water and 100 gr of ice both at a temperature of 0 C. If the specific heat of water is cw=4186...
Why are both ER Diagrams and Relational Modeling needed when a database system is developed?
Which data model provides a user with the best "program-data independence"? A. Hierarchial Model B. Network Model C. Relational Model D. Entity Relationship Model Why?

A consumer values a car at $20,000 and it costs a producer $15,000 to make the same

Question:

Step by Step Answer:

C 2000 worth of buyer surplus and 3000 of seller surplus corre...View the full answer

Managerial Economics

Students also viewed these Business questions