Billy Mac Tailor drives an eighteen-wheeler CG Carriers.He always stops at All Bright truck stops to buy diesel fuel.He is a preferred customer and gets a free meal and shower worth $10.00.But All Bright charges $12.00 more for a fill up than most competitors.Which of the following is true?
A)CG Carriers gets a benefit of $22.00 because Tailor is a preferred customer.
B)CG Carriers has a wealth reduction of $2.00 even though they do not know about Tailor's actions.
C)There is a wealth transfer to Billy Mac Tailor and CG Carriers has a wealth reduction of $12.00.
D)Billy Mac Tailor increases his income by $10.00 and CG Carriers also benefits.

Question

Quizplus · Accepted Answer

CG Carriers has a wealth reduction of $12.00 because they are paying more for fuel than they would at other truck stops. Billy Mac Tailor benefits from the free meal and shower, which is worth $10.00. This results in a wealth transfer of $12.00 from CG Carriers to Billy Mac Tailor.

Billy Mac Tailor Drives an Eighteen-Wheeler CG Carriers