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10 January, 22:49

The selling price of a product is $8,000. The cost and hassle involved in buying the product is $175. The benefit received from the product to a buyer is labelled "A." The seller's profit is $400. In this case, which of the following equations will accurately calculate the buyer's value?

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  1. 11 January, 00:01
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    These are the options for the question:

    a) A + $8,000

    b) $8,000 + $400

    c) $8,000 - A

    d) A - ($8,000 + $175)

    e) (A + 400) - ($175)

    And this is the correct answer:

    d) A - ($8,000 + $175)

    Explanation:

    The buyer's value is the total value that a consumer obtains from a product after substracting the purchase cost, and the cost of the personal effort involved in obtaining the product.

    The formula is:

    Buyer's Value = Benefit Received - (Selling Price + Cost of Effort to Purchase)

    If we plug the amounts into the formula we obtain the correct option:

    Buyer's Value = A - ($8,000 + $175)
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