The Supplier of a Factor of Production Has a Reservation

Multiple Choice

The supplier of a factor of production has a reservation price of $100. The purchaser of the factor of production has a reservation price of $200. If the factor of production is unique, then:

A) there will be no transaction since $200 is greater than $100.
B) a transaction will occur, and the price paid for the factor of production will be $150.
C) a transaction will occur, and the price paid for the factor of production will be $200.
D) a transaction will occur, and the price paid for the factor of production will be $100.