Question
The following table gives the willingness to pay for cars for eight individuals. There is a constant marginal cost of 30 to produce a car.
The following table gives the willingness to pay for cars for eight individuals. There is a constant marginal cost of 30 to produce a car. Assume there are no fixed costs and that each individual chooses to either buy one car or zero.
Person Willingness to Pay
A 50
B 45
C 42
D 32
E 20
F 17
G 10
H 3
Determine consumer and producer surplus under perfect competition; the price, consumer and producer surplus under a monopolist who is unable to price discriminate; and the price, consumer and producer surplus with another one who is able to price discriminate.
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