Question in picture

1) Columbia students love baseball caps with the University lion. Assume this market is perfectly competitive and has ten buyers and ten sellers. The following table shows the reservation values for both buyers and sellers. \"Reservation Value\" is the least favorable point at which one will accept a negotiated agreement. F or example, for a seller, this means the amount they would be willing to accept, while for a buyer it would mean the amount they would be willing to pay. Reservation Value of Reservation Value of Buyer Buyer (3) or Seller Seller ($) or Willin_ness to Pa Willin ess to Acce t 11 15 19 21 26 30 34 37 India 19 Gamma 3'9 Juliet 13 Delta 41 a) Draw out the demand and supply curves for caps in this market. b) What is the equilibrium quantity of caps bought/sold? At what equilibrium price? Which individuals are indifferent between trading and not trading? c) At the equilibrium price and quantity, what is the amount of producer surplus? What is consumer surplus? What is social surplus? d) Does the equilibrium outcome maximize social surplus? Explain why or why not. Is it Pareto efcient? Explain why or why not. e) Suppose the price in the market is forced to be $19, what is social surplus in this scenario? Is this Pareto efficient? Why or why not? 0 Suppose a price floor of $39 is imposed on this market, which does not allow the price of caps to drop below $39. How many caps will be sold and what is the new social surplus? Is this Pareto efcient? Why or why not