What is the equilibrium market price in the market

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Reference no: EM132649637

Consider a market where there are 10 potential buyers and 10 potential sellers. Each buyer is only looking to purchase one unit of this good, and each seller can only produce and sell one unit of this good.

Question 1: The 10 potential buyers' values (the most they'd be willing to pay) are: 4, 4, 5, 6, 6, 7, 8, 8, 8, 9

Question 2: The 10 potential seller's cost of producing the one unit are: 4, 5, 6, 7, 7, 8, 9, 9, 9, 10

Question 3: What is the equilibrium market price in this market? How many units will be bought/sold?

Question 4: At that equilibrium price, what is the total consumer surplus that is generated? What is the total producer surplus?

You don't need to turn in anything for this part, but you should play with the numbers to convince yourself that the total surplus (consumer plus producer) can never be higher than what you got in the previous part.

Reference no: EM132649637

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