Question

Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $535,000. This fourth parcel _____
a) will
b) will not
be sold, because _______
a) edison
b) hilary
c) no one
d) crystal
will purchase it from the seller for at least the minimum price.

Answer 1

Answer:

a) will

d) crystal

Explanation:

Please find the information needed to answer this question in the attached image

Willingness to pay is the highest amount a consumer would be willing to buy a product. If the price of the good is below the willingness to pay, the consumer would purchase the good.

The three beachfronts were sold to Alyssa, Tim and Brian.

The new sale of the beachfront at $535,000 would be sold to crystal because her willingness to pay ($550,000) is higher than the price of the beachfront.

the consumer surplus from the purchase would be $550,000 - $535,000 = $15,000