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Read and consider the "Willingness to Pay" example in Section 7-1 (Chapter 7 Section 1).
Everyone shops for things they need for themselves and for gifts for others. Your old car just died and it's not worth anything. But the local Toyota dealership has a sale on the new Corolla Hybrid that gets 45 MPG all around. The list price is $28,590. They really want to make a sale because they have too many in stock and their floorplanning costs are through the roof. Your friend works at that dealership and finds out that they paid $25,000 for the car. Your budget tells you that you only have $26,500 to spend, that's the most you can pay. You test drive the car and negotiate with the dealer and settle on a sale price of $26,000.Please evaluate and explain the:
willingness to pay,
consumer surplus,
demand,
producer surplus,
producer cost, and
willingness to sell of this transaction.
Define these terms in your explanation, not as separate definitions. Incorporate the meaning into your narrative so that you write a convincing story. Comment on the initial posts of at least two of your classmates. Your comments should support or challenge what they write with some level of detail to make this a "discussion". Be sure to name the person you address.
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