Table 7-12
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality.
-Refer to Table 7-12. You wish to purchase 10 piano lessons for yourself and for your brother, so you take bids from each of the sellers. You will take lessons at the same time, so one teacher cannot provide lessons to both of you. You must pay the same price for both sets of lessons, and you will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons. What bid will you accept?
A)$351
B)$349
C)$201
D)$199

Question

Table 7-12
The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. 
-Refer to Table 7-12. You wish to purchase 10 piano lessons for yourself and for your brother, so you take bids from each of the sellers. You will take lessons at the same time, so one teacher cannot provide lessons to both of you. You must pay the same price for both sets of lessons, and you will not accept a bid below a seller's cost because you are concerned that the seller will not provide all 10 lessons. What bid will you accept?
A)$351 
B)$349 
C)$201 
D)$199

Quizplus · Accepted Answer

The opportunity cost to Seller 2 for providing 10 lessons is $350, while the opportunity cost for Seller 1 is $351. Thus, Seller 2 is able to provide the lessons at a lower cost and still make a profit. Therefore, the bid from Seller 2 of $349 should be accepted.

Table 7-12 The Numbers Reveal the Opportunity Costs of Providing 10 Piano