reservation price

[ranjankumarnayak5]

[Rootz]

B since all the other options have a price greater than N's reservation price.

[varnika1880]

There won't be any trade

[ranjankumarnayak5]

is the ans d?

[Dr. Strange]

Reservation price of a person is the utility( i.e his perceived value ) of the good in the eyes of the person.

A believes that value of the good is 400 so he will only sell the good if he gets more than his reservation price i.e if he will sell only for more than 400.

Similarly B will buy only if its cost is less than 360.

Hence seeing the above condition it is visible that no trade will take place.Option d is correct.

[ranjankumarnayak5]

Sir,got it. thanks a lot.