Jannah is a marketing consultant. Irene and Dalia are potential customers interested in commissioning Jannah to undertake a market survey and compile the findings in a report. Irene is willing to pay $500 for the service while Dalia is willing to pay $800. Suppose that the opportunity cost of Jannah's time is $1,200. Assume that Irene and Dalia do not know each other. If the price is $500 per copy,
A) only Dalia will purchase Jannah's services and Jannah will undertake the job for her.
B) only Irene will purchase Jannah's services and Jannah will undertake the job for her.
C) both Irene and Dalia will purchase Jannah's services and Jannah will undertake the job.
D) both Irene and Dalia will want to purchase Jannah's services but Jannah will not be willing to undertake the job.

Question

Quizplus · Accepted Answer

Jannah's opportunity cost is $1,200, which is higher than what both Irene ($500) and Dalia ($800) are willing to pay. Therefore, even though both might want her services at their respective prices, Jannah would not find it worthwhile to undertake the job since the payment does not cover her opportunity cost.

Jannah Is a Marketing Consultant