Question

The tables below show the reservation values of buyers and sellers in the market for used iPhones Reservation Value Buyer ervation Value Seller Madeline 70 60 50 Tom Mary 10 20 30 40 50 60 70 Sean Dave 30 20 10 Phil Adam Matt Fiona Kim Suppose the minimum price is given as $55 (a "price floor"). Which of the following statements is true in the market for used iPhones? O A. Kim and Ty will each be willing to buy an iPhone. O B. Dave and lan will each be willing to buy an iPhone. O C. Madeline and Katie will each be willing to buy an iPhone. O D. Sean and Dave will each be willing to buy an iPhone.

Answer 1

A buyer is willing to buy a product when his or her reservation price is equal to or more than the given market price.

In the given case, minimum price is $55.

The reservation values of buyers shows that the reservation value of Madeline and Katie is greater than the given minimum price.

So,

Madeline and Katie will each be willing to buy an iPhone.

Hence, the correct answer is the option (C).