In a two-person exchange, if the price offered to the seller is less than the opportunity cost of production, the exchange will not take place.

Question

Quizplus · Accepted Answer

This is because the seller would not be willing to produce and sell the item at a price that is lower than what they could earn by using their resources to produce something else, or by not producing anything at all. As a result, the seller would rather keep their resources and forego the potential income than engage in an exchange that would result in a loss.

In a Two-Person Exchange, If the Price Offered to the Seller