A Consumer Values a House at $525,000 and a Producer

question 13

Multiple Choice

A consumer values a house at $525,000 and a producer values the same house at $485,000.If the transaction is completed at $510,000,what amount of tax will result in unconsummated transaction?​

• A)​A tax of $9,000
• B)A tax of $14,000
• C)A tax of $15,000
• D)​A tax of $18,000

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Definitions:

Mutually Beneficial Trades

Exchanges between parties that improve the welfare of all involved, typically occurring in markets where buyers and sellers agree on terms that leave them both better off.

Monopolist

A firm that is the only producer of a good that has no close substitutes.

Linear Demand Curve

A graphical representation showing how the quantity demanded of a good or service varies with its price, typically depicted as a straight line on a graph.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good or service and the actual price they pay, reflecting consumer benefit.