Jane is interested in buying a car from a used car dealer. Her maximum willingness to pay for the car is $20 (thousand). Bo, the dealer, is willing to sell the car as long as he receives at least $8 (thousand), Thus there is a potential surplus or gain from trade of $12 (thousand). Jane and the dealer bargain over the transaction price, p. If they cannot agree on a price, then the transaction does not occur, and neither party receives any surplus. If instead, Bo can only get $5 (thousand) elsewhere, then the price that maximizes the Nash product changes by $ - 1.5 thousand. (Enter your response rounded to one decimal place and include a minus sign if necessary.) This change in price is in Jane's favor.

Jane is interested in buying a car from a used car dealer. Her maximum willingness to pay for the car is $20 (thousand). Bo, the dealer, is willing to sell the car as long as he receives at least $8 (thousand), Thus there is a potential surplus or gain from trade of $12 (thousand). Jane and the dealer bargain over the transaction price, p. If they cannot agree on a price, then the transaction does not occur, and neither party receives any surplus. If instead, Bo can only get $5 (thousand) elsewhere, then the price that maximizes the Nash product changes by $ - 1.5 thousand. (Enter your response rounded to one decimal place and include a minus sign if necessary.) This change in price is in Jane's favor.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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