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Danny has 9 apples, and his demand equation is Q = 20 - P. Emma has 9 apples, and her demand equation for apples is Q = 30 - P. Q is in terms of apples and P is in terms of dollars/apple.
a) Will they voluntarily trade apples? Why? Who will want to buy? Who will want to sell?
b) How many apples are traded? At what price? Eventually how many apples will Danny consume? How many apples will Emma consume? Please show your calculation steps.
c) Calculate the total gains from trade.
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