6. John has a car he wants to sell. His goal is to get as muchas he can for the car (profit-maximizer). He lists the car in thelocal paper with no price – just “highest bidder” and announces atime to come by if interested. 3 potential buyers show up. Paul iswilling to pay $1,000 for the car. George is willing to pay $2,000for the car. Ringo is willing to pay $8,000 for the car. Georgemakes an offer of $2,000 first and Paul leaves. Answer thefollowing questions:

a. Who will get the car and at what price?

i. Paul will come back and get the car for $1,000

ii. George will get the car for $2,000

iii. Ringo will get the car for $8,000

iv. Ringo will get the car for just over $2,000

b. What will the consumer surplus be?

i. 0 because the buyer is paying exactly his willingness to payprice

ii. Ringo will leave with a consumer surplus of just under$6,000

iii. Ringo will leave with a consumer surplus of just over$6,000

iv. Ringo will leave with a consumer surplus of $8,000

c. Suppose John was willing to sell the car for $1,500 but noless. What is the producer surplus in this case?

i. 0 because John did not get his expected price

ii. 0 because John got more than his expected price

iii. 0 because John got less than his expected price

iv. Just over $500 give the price he was able to sell it forthat much more than his willingness to sell price