Paul owns a home on the top of a hill and enjoys an unobstructed view of a large wooded area.The view was a large factor in his decision to buy the house and Paul values his view at $5000 per month.Sid purchases the undeveloped wooded area with plans to build a retail shopping centre.Sid expects to earn $10,000 a month from the shopping centre,which is $3000 more than his next best alternative.
-Refer to the information above.The most Paul would offer Sid to prevent construction of the shopping centre is
A) $0.
B) $2000.
C) $3000.
D) $4999.
E) $10,000.

Question

Quizplus · Accepted Answer

Paul values his view at $5000 per month, so the most he would offer Sid to prevent construction is just under that amount, which is $4999.

Paul Owns a Home on the Top of a Hill