How to verify all of the prices and quantities calculated

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Reference no: EM13201686

Demand with zero transaction costs is Q1D = 50 -P and supply is Qs = -7 + 2P.

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 sellerwho wants an intermediaries services must pay $8 for them. What is the maximum per unit that sellersare willing to pay internediaries if hiring them saves buyers $8 in transaction costs?

c) Does your answer ot Q 16A chnage if buyers pay $8 per unit to the intermediary but sellers offer to rebate part of that expense to buyers?

Reference no: EM13201686

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