Multiple Choice
The economic value which can be created by a transaction between two people, Ed (seller) and Luis (buyer) , is $50 as Ed's opportunity cost of selling is $135 and Luis' valuation of the good is $185.If each gains $25 from this transaction, which of the following conclusions can be drawn?
A) Transaction costs are zero.
B) Luis has higher bargaining power than Ed.
C) Ed has higher bargaining power than Luis.
D) Transaction costs are positive.
Correct Answer:
Verified
Correct Answer:
Verified
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