Imagine that you own a mint-condition recording of Elvis Presley’s first album.
Because you are not an Elvis Presley fan, you decide to sell it. One way to do so is
to hold an auction.
Four Elvis fans show up for your auction: John, Paul, George, and Ringo. Each
of them would like to own the album, but there is a limit to the amount that each
is willing to pay for it. Table 7-1 shows the maximum price that each of the four
possible buyers would pay. Each buyer’s maximum is called his willingness to
pay, and it measures how much that buyer values the good. Each buyer would be
eager to buy the album at a price less than his willingness to pay
Because you are not an Elvis Presley fan, you decide to sell it. One way to do so is
to hold an auction.
Four Elvis fans show up for your auction: John, Paul, George, and Ringo. Each
of them would like to own the album, but there is a limit to the amount that each
is willing to pay for it. Table 7-1 shows the maximum price that each of the four
possible buyers would pay. Each buyer’s maximum is called his willingness to
pay, and it measures how much that buyer values the good. Each buyer would be
eager to buy the album at a price less than his willingness to pay
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