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Calculate the price-consumer and producer surplus

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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

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

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

3) Consider the welfare implications of the different price structures from 1 and 2 excercise. Which outcomes are perfectly efficient?

Reference no: EM132478872

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