Under Which of the Following Situations Would a Seller Prefer

question 5

Multiple Choice

Under which of the following situations would a seller prefer to incur the cost of improving the product quality?

• A)If the increase in buyer's valuation for the improved product is higher than the cost of improving it.
• B)If the increase in the seller's opportunity cost of improving the product is higher than the price of the product.
• C)If the product improvement lowers the producer surplus.
• D)If the product improvement allows the seller to a break even.