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Paintings are worth between $0 and $100 to sellers, and the sellersworth is uniformly distributed between these values. Buyers value the paintings at 1.5 times
Paintings are worth between $0 and $100 to sellers, and the sellersworth is uniformly distributed between these values. Buyers value the paintings at 1.5 times the sellers worth. Sellers know the worth of their painting, but buyers cannot tell the true worth. They only know the distribution of worths. Under these conditions, what is the equilibrium price and volume traded in a competitive equilibrium? Explain your answer.
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