8. Consider the following limit-order book of a specialist. The last trade in the stock occurred at a price of $50.

Limit Buy Orders Limit Sell Orders Price Shares Price Shares

$49.75 500 $50.25 100 49.50 800 51.50 100 49.25 500 54.75 300 49.00 200 58.25 100 48.50 600

a. If a market buy order for 100 shares comes in, at what price will it be filled?

b. At what price would the next market buy order be filled?

c. If you were the specialist, would you want to increase or decrease your inventory of this stock?