Asked by court Adams on Jun 03, 2024
Verified
Jim is haggling with a car dealer on the price of a used car.During the bargaining,the storekeeper discovers that the car's stereo is better than he or Jim originally realized.If Jim is a huge music fan,the total surplus available from the sale
A) Increases
B) Decreases
C) Is not affected
D) All of the above
Total Surplus
The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from the production and consumption of goods or services.
Car's Stereo
An audio system installed in an automobile that plays music or broadcasts from various sources, enhancing the driving experience.
Music Fan
An individual who has a strong interest or enthusiasm for music and its various genres, often following artists and attending concerts.
- Familiarize oneself with the idea of bargaining and negotiation in various environments.
- Ascertain how fluctuations in the worth of alternative choices (disagreement value) influence negotiation positions.
Verified Answer
RE
Robert ElkindJun 07, 2024
Final Answer :
A
Explanation :
The total surplus available from the sale increases because the car's stereo has additional value for Jim as a music fan. As a result, the value of the car to Jim has increased, and he may be willing to pay more for it. In terms of consumer and producer surplus, this means that there is more potential value to be gained from the transaction.
Learning Objectives
- Familiarize oneself with the idea of bargaining and negotiation in various environments.
- Ascertain how fluctuations in the worth of alternative choices (disagreement value) influence negotiation positions.