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

Calculate consumer and producer surplus under perfect competition.

E1)Consumer surplus?

Producer surplus?

E2)Calculate the price, consumer and producer surplus under a monopolist who is unable to price discriminate?

p=?

CS=?

PS=?

2) Calculate consumer and producer surplus under a perfectly price discriminating monopoly.

CS=?

PS=?

3) Consider the welfare implications of the different price structures from based on previous exercise.

Which outcomes are perfectly efficient? (more than one option can be correct)

a) Perfect Competition

b)Non-price-discriminating monopoly

c)Price-discriminating monopoly