Part A
Assume that Ray, through his vast industry experience, has perfect knowledge about the costs (and quality) of a computer supplier. Moreover, assume that the computer supplier acts like a price taker in the negotiations. What offer should Ray make to the supplier in order to get the best possible price? Make sure you highlight the intuition for your suggestion.
We can assume that in a perfectly competitive market, as Ray has perfect knowledge of costs and quality, his best possible price would be equal to / above marginal cost. Assuming that Ray is a monopoly in the market and there’s an absence of other consumers wiling to pay more, Ray should make a bulk offer with one supplier (assuming there is more than one supplier). This way he will maximise cost savings and profits by quoting above the MC on the decreasing MC curve. insert two figures: one with MC flat, one with MC going diagonally down he would make a bulk order if he knew there was a decreasing MC curve but if MC is flat, he would be impartial to whether or not use 1 or more suppliers
Ray has the advantage so will take first, if he didn’t have this perfect knowledge he would take second

Practically, if Ray does not have perfect knowledge, but instead has fairly accurate information about the supplier’s costs, what are some of the potential problems that Ray might face? Can these problems be mitigated (and how)? Ensure you explain your answer.
Problems Ray may face include misjudging what the MC is i.e overstating it and offering too much (expensive, but supplier would accept), or understating it and offering too little (company don’t accept). to mitigate this Ray should offer under the MC - if it gets refused, he should re-submit multiple rounds of offers in reasonable business judgement increments. Ray should be weary of what other hardware is required in his purchase - the supplier