Question

In: Economics

Suppose that in a given round in an online market experiment, there are a 10 students...

Suppose that in a given round in an online market experiment, there are a 10 students assigned roles of sellers and 10 assigned roles as buyers. Altogether, they are assigned numbers 1,2,3....22. Each even numbered student is a buyer, and each odd numbered student is a seller. The costs of sellers are twice their student number. The value of buyers is his student number.

a) What is the market clearing quantity?

b) What is the highest possible market clearing price?

c) What is the lowest possible market clearing price?

Solutions

Expert Solution

a) Equilibrium Quantity is 5 because after that the next seller has cost 12 so he/she won't sell for any price less than 12 but any student has no more than 11 as valuation so no one would buy it. Therefore equilibrium quatntity is 5 units.

b) Highest possible market clearing price is what the maximum buyer would be willing to pay which is 11 monetary units.

c) Lowest possible market clearing price is 10 below which the 5th seller won't sell.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

In an​ experiment, college students were given either fourquarters or a​ $1 bill and they...
In an experiment, college students were given either four quarters or a $1 bill and they could either keep the money or spend it on gum. The results are summarized in the table. Complete parts (a) through (c) below.Purchased GumKept the MoneyStudents Given Four Quarters31311515Students Given a $1 Bill19192828a. Find the probability of randomly selecting a student who spent the money, given that the student was given four quarters.The probability isnothing.b. Find the probability of randomly selecting a student who...
Suppose market return can be +10% or -10% with equalprobability.When market return is +10%,...
Suppose market return can be +10% or -10% with equal probability. When market return is +10%, stock A returns +5%. When market return is -10%, stock A returns -5%. What is the beta of stock A?
Q1-Suppose that the inverse market demand for pumpkins is given by ?=$10−0.05? . Pumpkins can be...
Q1-Suppose that the inverse market demand for pumpkins is given by ?=$10−0.05? . Pumpkins can be grown by anybody at a constant marginal cost of $1. 1- Suppose Linus could grow pumpkins at a marginal cost of $0.95. What would be Linus's price and quantity? (Hint: assume Linus will price his product so as to undercut Lucy by the least amount possible.) PLinus = $----- QLinus = ------- 2- In this scenario, Lucy's output would a- be unaffected b- fall...
Suppose that the market demand curve is given by q=10-p and that production costs are zero...
Suppose that the market demand curve is given by q=10-p and that production costs are zero for each of four oligopolists. (a) Determine the level of output for each of the four oligopolists according to the Cournot model. (b) What general rule can you deduce from your answer to part (a)?
Suppose that the average time that students spend online daily is normally distributed with a mean...
Suppose that the average time that students spend online daily is normally distributed with a mean of 244 minutes and st dev of 49 minutes.  Answer the following questions. What is the probability that a randomly picked student spends more than 265 minutes online daily?  Is this unusual, why or why not? If a group of 21 students is randomly selected, what is the probability that their average time spent online is more than 265 minutes?  Is this unusual or not and why?
Suppose Market demand is given as Qd = 60 – 2P. Market supply is given as...
Suppose Market demand is given as Qd = 60 – 2P. Market supply is given as Qs = 2P Also assume ATC = 0.4Q. a. How many units of the product would the perfectly competitive market supply? What would the equilibrium price be? b. What are the profit maximizing price and quantity if this market is a monopoly? c. Calculate the dead-weight loss created if this market started off as perfectly competitive but then became a monopoly.
The given data set contains the amount of time(in minutes) students in an online course spent...
The given data set contains the amount of time(in minutes) students in an online course spent studying an assignment in a certain semester. According to the historical study, the mean time students would spend on this section nationwide is 95 minutes. While a researcher thinks that this semester student might be using more time. Use ? = 0.05 level of significance. Keep at least three decimal places for numerical answers. (1) State the null hypothesis and alternative hypothesis for this...
In an​ experiment, college students were given either four quarters or a​ $1 bill and they...
In an​ experiment, college students were given either four quarters or a​ $1 bill and they could either keep the money or spend it on gum. The results are summarized in the table. Complete parts​ (a) through​ (c) below. Purchased Gum Kept the Money Students Given Four Quarters 27 13 Students Given a​ $1 Bill 18 26 a. Find the probability of randomly selecting a student who spent the​ money, given that the student was given four quarters. The probability...
In an​ experiment, college students were given either four quarters or a​ $1 bill and they...
In an​ experiment, college students were given either four quarters or a​ $1 bill and they could either keep the money or spend it on gum. The results are summarized in the table. Complete parts​ (a) through​ (c) below. Purchased Gum Kept the Money Students Given Four Quarters 30 12 Students Given a​ $1 Bill 14 26 a. Find the probability of randomly selecting a student who spent the​ money, given that the student was given four quarters. The probability...
In an​ experiment, college students were given either four quarters or a​ $1 bill and they...
In an​ experiment, college students were given either four quarters or a​ $1 bill and they could either keep the money or spend it on gum. The results are summarized in the table. Complete parts​ (a) through​ (c) below. Purchased Gum Kept the Money Students Given Four Quarters 35 17 Students Given a​ $1 Bill 19 30 a. Find the probability of randomly selecting a student who spent the​ money, given that the student was given four quarters. The probability...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT