Q1) Under what circumstances could a producer extract the entire consumer surplus in the below figure? Explain using the numbers in the below graph. Hint: what selling strategy should the producer follow to take away the surplus from consumers into their pockets. PRICE (dollars per car) $1 million 950,000 Consumer 900,000 850,000 surplus 847,975 800,000 750,000 700,000 650,000 600,000 550,000 500,000 Market Demand for Porsche Spyder 2 3 4 QUANTITY DEMANDED (cars per year) 5 6 7 8

Q1) Under what circumstances could a producer extract the entire consumer surplus in the below figure? Explain using the numbers in the below graph. Hint: what selling strategy should the producer follow to take away the surplus from consumers into their pockets. PRICE (dollars per car) $1 million 950,000 Consumer 900,000 850,000 surplus 847,975 800,000 750,000 700,000 650,000 600,000 550,000 500,000 Market Demand for Porsche Spyder 2 3 4 QUANTITY DEMANDED (cars per year) 5 6 7 8

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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