Question
Consider a market where there are 10 potential buyers and 10 potential sellers. Each buyer is only looking to purchase one unit of this good,
Consider a market where there are 10 potential buyers and 10 potential sellers. Each buyer is only looking to purchase one unit of this good, and each seller can only produce and sell one unit of this good.
The 10 potential buyers' values (the most they'd be willing to pay) are: 4, 4, 5, 6, 6, 7, 8, 8, 8, 9
The 10 potential seller's cost of producing the one unit are: 4, 5, 6, 7, 7, 8, 9, 9, 9, 10
What is the equilibrium market price in this market? How many units will be bought/sold?
At that equilibrium price, what is the total consumer surplus that is generated? What is the total producer surplus?
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