If a Seller's Reservation Value for a Good Is $10

question 23

Multiple Choice

If a seller's reservation value for a good is $10 and the price at which the good is sold is $15,his producer surplus is ________.

• A) $25
• B) $150
• C) $1.5
• D) $5

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Definitions:

Tickler File

An organizational system used to remind a person of tasks that need to be done at specific future dates.

Unpaid Vouchers

Refers to vouchers, which represent obligations or promises to pay, that have not yet been settled or paid.

Gross Method

An accounting method for recording purchases of inventory at their full invoice prices without deducting any cash discounts offered.

Periodic Inventory Method

A system of inventory management and cost determination that updates the ending inventory balance and the cost of goods sold only at the end of an accounting period.