Fred truthfully tells a car dealer that the maximum amount he is willing to pay for a Ford Mustang is $20,000.The dealer says,"You're lucky; we have only one left on the lot for $20,000." Which of the following statements is true?
A) Fred gets a consumer surplus of $15,000.
B) Fred and the dealer get a consumer surplus of $10,000 each.
C) Fred gets a consumer surplus of $20,000.
D) Fred gets no consumer surplus.
E) The dealer earns a consumer surplus of $20,000.
Correct Answer:
Verified
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