1. Assume P = 8000 + 80Q , MC = 500+ 90Q. Suppose that Beautiful Cars had sufficient information and so much bargaining power that it could charge each consumer, separately, the maximum they would be willing to pay. Draw the demand and marginal cost curves (as in Figure 7.14 https://www.core-econ.org/the-economy/book/text/07.html#figure-7-14e ), and indicate on your diagram:
2. the number of cars sold
3. the highest price paid by any consumer
4. the lowest price paid
5. the consumer and producer surplus
6. Can you think of any examples of goods that are sold in this way?
7. Why is this not common practice?
8. Some firms charge different prices to different groups of consumersfor example, airlines may charge higher fares for last-minute travellers. Why would they do so and what effect would it have on the consumer and producer surpluses?
9. Suppose a competition policy has changed the rules of the game. How could this give consumers more bargaining power?
10. Under these rules, how many cars would be sold?
11. Under these rules, what would the producer and consumer surpluses be?