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Suppose that we create a prediction market for weather. The contingent contract traded in the market is as follows: If the weather is bad, you
Suppose that we create a prediction market for weather. The contingent contract traded in the market is as follows: If the weather is bad, you get $1; otherwise you get 0. In this prediction market we have 4 buyers and 5 sellers. Their willingness to buy and willingness to sell are illustrated as follows: Buy offers (N=4): $0.15, $0.12, $0.09, $0.05 Sell offers (M=5): $0.30, $0.17, $0.13, $0.11, $0.08 (1) If the price of the contract is $0.085, how many sellers want to sell the contract? How many buyers want to buy the contract
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