What price would the average buyer being willing to pay for

Assignment Help Microeconomics

Reference no: EM133440476

Questions: ChronoZ4 hosts a marketplace for used watches. The site has 100 potential buyers of a used Rolex and 100 potential sellers. Buyers value a valid used Rolex at $2,000, and value knock-off used Rolexes at $500. There are 3 types of sellers: 20 of them are selling knock-off Rolexes and will sell at any price above $300, 40 of them are selling valid used Rolexes and will sell at any price above $1,300, and 40 of them are selling valid Rolexes and will sell at any price above $1,800. Buyers cannot differentiate between sellers of valid used Rolexes and sellers of knock offs.

a) If all 100 potential sellers of watches put their watches up for sale, what price would the average buyer being willing to pay for a used Rolex?

b) If potential sellers only offer their watches for sale if the price is above their value of the watch, then at what price will the market for used watches stabilize?

Reference no: EM133440476

Questions Cloud

Analyze the major economic forces that affect the firm : Summarize the firm's history, the economic, social, and political forces that affect it most. Present recent and current operating results

How much in joint costs does garden allocate to each product : Calculate the gross margin on the sale of the product for human use in March under the constant gross-margin percentage NRV method.

Describe the game and its solution : Represent in normal form the game played by any two states deciding whether to enact 'inflation relief' payments or not. Describe the game and its solution

What would be the total annual cash inflows associated : What would be the total annual cash inflows associated with the new machine for capital budgeting purposes?

What price would the average buyer being willing to pay for : If all 100 potential sellers of watches put their watches up for sale, what price would the average buyer being willing to pay for a used Rolex?

What are the benefits of hyperdocs : What topics lend themselves well to hyperdocs? How can hyperdocs support individualized learning and UDL (Universal Design for Learning)?

Identify the technological goals : Identify the technological goals, objectives, and parameters that the nature of the management falls under.

Discuss why an organization needs an incident response plan : Discuss why an organization needs an incident response plan order to secure information and knowledge?

What are some of the impacts of information technology : Explain the concept of incremental analysis and explain how it is used in decision making and What are some of the impacts of information technology

User Account

All Pages