(Adapted from ongoing joint work with Weiwei Wang and Jianxin Zheng.) Consider a market with two buyers and two sellers and in which buyers and sellers can trade multiple units. Buyer 1 may buy up to two units, and the first unit has value 32 and the second unit value 2 for buyer 1, and that buyer 2 may buy up to two units, and the first unit has value 19 and the second unit has value 2 for buyer 2. Moreover, consider that seller 1 can sell up to two units, and the first unit has cost 1 and the second unit has cost 30 for seller 1, and that seller 2 can sell up to two units, and the first unit has cost 15 and the second unit has cost 30 for seller 2. Illustrate this market with a supply and demand graphic similar to Figure 1. Find the competitive prices, competitive allocations and total surplus.

30 28 supply 26 24 = = =competitive puces_ _ _ _ thousand US$ 18 16 demand 14 12 10 2 3 4 5 6 7 8 9 10 traders Figure 1: Supply and demand for tractors, and competitive prices 21