Suppose Fred honestly tells the car dealer that the maximum amount he's willing to pay for a Ford Escort is $12,000 . The dealer says, "You're in luck! We have one on the lot for $12,000.". Which of the following statements is true?
a. The dealer's consumer surplus is $12,000.
b. Fred and the dealer share $12,000 of consumer surplus.
c. Fred's consumer surplus is $12,000.
d. Fred receives no consumer surplus.
e. The car is not worth $12,000.
D
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