Amanda Buys a Ruby for $330 for Which She Was

question 161

Multiple Choice

Amanda buys a ruby for $330 for which she was willing to pay $340. The minimum acceptable price to the seller, Tony, was $140. Amanda experiences

• A) a consumer surplus of $10, and Tony experiences a producer surplus of $190.
• B) a producer surplus of $200, and Tony experiences a consumer surplus of $10.
• C) a consumer surplus of $670, and Tony experiences a producer surplus of $200.
• D) a producer surplus of $10, and Tony experiences a consumer surplus of $190.

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Definitions:

Rule of Thumb

A general principle that provides practical instructions for accomplishing or approaching a certain task.

Reservation Price

The maximum price a buyer is willing to pay for a good or service, beyond which the buyer will forego the purchase.

Bundling

Bundling refers to the marketing strategy where multiple products or services are sold as a single combined package, often at a discounted price compared to buying each item individually.

Sales Revenue

The total amount of money generated by the sale of goods or services before any costs are subtracted.