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Double Auction: A company produces shirts for $8, and know that their customer at store 1 with the highest nth valuation (n=1,2,3...) is willing to
Double Auction: A company produces shirts for $8, and know that their customer at store 1 with the highest nth valuation (n=1,2,3...) is willing to pay a maximum of {0,20-2n}. Find the equilibrium quantity of shirts that the company sold at store 1.
Suppose that store 2's customers are willing to pay double what store 1's customers are willing to pay. (highest customer valuation is now 2(20-2*1) which is thirty six. The company only brought to store 2 the same amount that they sold at store 1. Find store 2's equilibrium price.
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