Question

Suppose that there are three beachfront parcels of land available for sale in Huntington and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $595,000. The following table states each person's willingness and ability to purchase a parcel.

	Willingness and Ability to Purchase
	(Dollars)
Alyssa	660,000
Brian	620,000
Crystal	570,000
Edison	540,000
Hilary	530,000
Tim	750,000

Which of these people will buy one of the three beachfront parcels? Check all that apply.

Alyssa

Brian

Crystal

Edison

Hilary

Tim

Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $582,500. This fourth parcel be sold, because will purchase it from the seller for at leas the minimum price.

Answer 1

(1) Those consumers will buy a parcel whose willingness to pay is higher than price of a parcel ($595,000).

So, consumers who will purchase are:

- Alissa

- Brian

- Tim

(2) The 4th parcel will not be sold, because nobody will purchase it from seller for a price higher than their maximum willingness to pay.

(Remaining consumers after Alissa, Brian and Tim buy first 3 parcel are: Crystal, Edison, Hilary. Each of them has a willingness to pay of les than $582,500).