The shares of the economic value of a particular transaction that accrues to the seller and the buyer depend on:
A)the buyer's opportunity cost.
B)the relative bargaining powers of the two parties.
C)the cost of production incurred by the seller while producing the good.
D)the lobbying techniques adopted by the two parties.

Question

Quizplus · Accepted Answer

The relative bargaining powers of the two parties determine the share of economic value that accrues to the seller and the buyer. If one party has more bargaining power than the other, they can negotiate a better deal for themselves, thereby receiving a larger share of the value of the transaction. Therefore, option B is the correct answer. Options A, C, and D may also play a role in determining the economic value of a transaction but are not the primary factors that determine the share of value that accrues to the seller and the buyer.

The Shares of the Economic Value of a Particular Transaction