Suppose Bianca Buys a Used a Textbook from Sebastian for $55

question 122

Multiple Choice

Suppose Bianca buys a used a textbook from Sebastian for $55. If Bianca's surplus from this transaction was $10, we can infer that:

• A)Bianca's reservation price was $45.
• B)Bianca's reservation price was $60, and Sebastian's reservation price was $50.
• C)Bianca's reservation price was $65.
• D)Sebastian's reservation price was $45.

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Definitions:

Lower Of Cost

An accounting principle ensuring that inventory is reported at the lower of its original cost or its market value if the market value is less.

Market Rule

A guideline or principle applied to assess the acceptability, pricing, or regulation of goods and services in a market.

Lower Of Cost

An accounting principle requiring that inventory is recorded at the lower of its historical cost or current market value.

Market Value

The prevailing market rate at which a commodity or service is traded.