When car dealerships post high prices for their cars and then negotiate deals based on their estimate of how much each person will pay,

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This is a form of price discrimination, where the dealership is trying to maximize their revenue by charging different prices to different buyers based on their willingness to pay. They post a high price to capture the maximum possible amount from buyers who are willing to pay that much, and then negotiate downwards to sell to buyers who are willing to pay less. This allows them to extract more surplus from buyers and increase their profits.

When Car Dealerships Post High Prices for Their Cars and Then