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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.)

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.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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, Jane 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 decirmal place and include a minus sign if necessary.) This change in price is in Jane's favor.
Transcribed Image Text: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, Jane 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 decirmal place and include a minus sign if necessary.) This change in price is in Jane's favor.
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