Which statement accurately defines the Zone of Possible Agreement (ZOPA)?

• A. It is the overlap between each party's acceptable outcomes (the zone where an agreement is possible).
• B. It is the single best outcome a negotiator hopes to secure.
• C. It is the minimum acceptable outcome of both parties.
• D. It is the range of prices one party is willing to pay.

Answer: (A)

The Zone of Possible Agreement is the range where both sides’ acceptable outcomes overlap, meaning a deal is possible. Each party has a reservation value: the minimum price a seller would accept or the maximum price a buyer would be willing to pay. If the seller’s minimum is at or below the buyer’s maximum, that overlap forms the ZOPA. That region is where offers and concessions can lead to an agreement; outside of it, neither side would find the deal acceptable. The other statements miss this mutual, overlapping nature: a single best outcome, or just the minimum acceptable outcome for both, or only one party’s price range, don’t capture the idea of a shared zone where both can agree.