Suppose you own a bicycle but haven't found the time to ride it much lately. These days, it is only worth $41 to you. One of your close friends, who recently got a job at the college bookstore two miles down the road, wants to take it off your hands. He offers you $70 for the bicycle, and you gladly accept. Your friend is also happy because he thinks the bicycle is worth $91. How much total value was created from this trade?

Question

Business

Selah

29 March, 08:33

Suppose you own a bicycle but haven't found the time to ride it much lately. These days, it is only worth $41 to you. One of your close friends, who recently got a job at the college bookstore two miles down the road, wants to take it off your hands. He offers you $70 for the bicycle, and you gladly accept. Your friend is also happy because he thinks the bicycle is worth $91. How much total value was created from this trade?

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Sage Garza · Answer 1

Value of the bike = $41

Value of the bike for buyer = $70

Bike value buyer thinks = $97

Solution:

Value for bicycle owner: $70 - $43 = $27

Value for buyer: $97 - $70 = $27

Total value: $27 * 2 = $54