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

Question

​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

Quizplus · Accepted Answer

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.

​Jim Is Haggling with a Car Dealer on the Price

Jim Is Haggling with a Car Dealer on the Price