For a Given Seller, the Figure Below Shows the Relationship

question 83

Multiple Choice

For a given seller, the figure below shows the relationship between the number of units produced and the opportunity cost of producing an additional unit of output. What is this seller's reservation price for the 250^th unit?

• A)$2
• B)$4
• C)$8
• D)$14

---

Definitions:

Inflation Rate

A measure of the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Real Rate

This is the interest rate adjusted for inflation, representing the real cost of borrowing and the real yield to lenders or investors.

Interest

The cost of borrowing money, typically expressed as an annual percentage rate, or the return on investment for savings.

Inflation

The frequency at which the overall cost of goods and services elevates, depreciating the purchasing power.