When Jaya Lewis was asked what it would take to get her to provide Eva Hillman an hour of tutorial lessons in economics, she replied,"$10.". So Eva said,"Fine, I'll pay you $10.". "No, no," Jaya, replied, the market price is $15!" Exasperated, Eva paid the $15 . Did Jaya change her mind about the price during the conversation?
a. Yes, she realized that Eva was willing to pay more so changed her asking price from $10 to $15.
b. Yes, the $5 difference in price was obviously negotiable and Jaya went for the higher price
c. No, Eva changed her mind. At first she was willing to pay $10 then decided to pay the $15.
d. No, Eva was testing Jaya's willingness to supply tutorial lessons and discovered it was $15.
e. No, it was simply a case of Jaya's opportunity cost being less than market price so Jaya ends up with a $5 producer surplus
E
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