If you are willing to purchase a house for $500,000 and you purchase the house for $500,000, this transaction will generate: a.

Question

2 years ago

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If you are willing to purchase a house for $500,000 and you purchase the house for $500,000, this transaction will generate: a.

$0 worth of buyer surplus and unknown amount of seller surplus. b. $0 worth of seller surplus and unknown amount of buyer surplus. c. No information provided. d. There is no surplus created for either of the party.

Business

1 answer:

Rainbow [258] · Answer 1 · 2022-08-22T11:14:15+03:00

Answer:c. No information provided

Explanation:

The fact that the house would be sold for $500.000 does not give us direct information about how much the seller was expecting, only what he or she accepted to sell it for, depending on the conditions it could mean they had no better offer and needed to sell it and therefore accepted what was offered even if it meant to lose a bit o gain much less that what they wanted, so since we are not offered information on the expectations of the seller we cannot say anything about it, then the other options are false, because it could even mean loss and no surplus.