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2. Consider the following market for shares of stock of a firm: There are 50 shares of a stock outstanding. There are 25 optimists, each
2. Consider the following market for shares of stock of a firm: There are 50 shares of a stock outstanding. There are 25 optimists, each with demand of ( (110-p) ) shares and 25 pessimists, each with demand of ( (90-p) ) shares. ( ( p ) stands for the share price.) If there are no constraints on shorting, what is the equilibrium price of the shares of stock and the positions (net equilibriun demands) of the optimists and pessimists?
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