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Competitive market with an equilibrium price

Assignment Help Microeconomics
Reference no: EM13153853

For Figure demand with zero transaction costs is Q1s =50-P and supply is Qs = -7 +2P

1435_Competitive market with an equilibrium price.png

A Verify all of the prices and quantities calculated in the discussion.

B Now assume that intermediaries come from a competitive market with an equilibrium price of $8 per unit for their services, that is any buyer or seller who wants and intermediary's services must pay $8 for them. What is the maximum per unit that sellers are willing to pay intermediaries if hiring them saves buyers $8 in transaction costs?

C Does your answer to Question 16a Change if buyers pay $8 per unit to the intermediary but sellers offer to rebate part of that expense to buyers?

Reference no: EM13153853

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