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

Question

Quizplus · Accepted Answer

Joss's opportunity cost is $1,200, which is higher than the total revenue from both Iris and Daphne ($500 + $800 = $1,300). However, since the price is $500 per copy, Joss would only receive $1,000 for two copies, which is less than the opportunity cost. Therefore, Joss will not be willing to undertake the job.

Joss Is a Marketing Consultant