The supplier of a factor of production has a reservation price of $100. The purchaser of the factor of production has a reservation price of $200. If the factor of production is unique, then:
A. a transaction will occur, and the price paid for the factor of production will be $150.
B. a transaction will occur, and the price paid for the factor of production will be $100.
C. there will be no transaction since $200 is greater than $100.
D. a transaction will occur, and the price paid for the factor of production will be $200.
Answer: D
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