Kayla and Kevin Are Friends Who Go Together to a Used

question 57

Multiple Choice

Kayla and Kevin are friends who go together to a used textbook seller who has two copies of the biology book that they both need for their class this semester. The cost to the seller of acquiring the books was $25 each and no other students will need this book. Kayla states that she is willing to pay $40 for the book, while Kevin says he is willing to pay $80. Which of the following describes the most likely conclusion to this scenario?

• A) The seller will sell the books to both Kayla and Kevin for $80 each because Kevin's higher value exceeds Kayla's willingness to pay.
• B) The seller will sell the books to both Kayla and Kevin for $40 each because if they tried to charge Kevin a higher price, Kayla would engage in arbitrage.
• C) The seller will sell one book to Kayla for $40 and one book to Kevin for $80 because this market meets all three requirements for price discrimination.
• D) The seller will sell the books to both Kayla and Kevin for $25 each because that is how much the seller paid for the books.

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Definitions:

Current Partners

Individuals or entities currently engaged in a business partnership, sharing responsibilities, profits, and losses of the venture.

Bonus

A bonus is an extra payment given to employees beyond their regular salary, often awarded for achieving specific performance targets or as part of the benefits package.

Capital Accounts

Represent the amount of money the owners have invested in a business, plus any profits or minus any losses.

Original Partners

The initial individuals or entities that form a partnership agreement to create and manage a business.