In general the formula for cash-on-the-table for a unit of a good not traded is Group...

In general the formula for cash-on-the-table for a unit of a good not traded is

Group of answer choices

Buyer's reservation price less seller's reservation price

Buyer's reservation price multiplied by the seller's reservation price Seller's reservation price less

Buyer's reservation price Seller's reservation price divided by the

Buyer's reservation price Buyer's reservation price plus seller's reservation price

Buyer's reservation price divided by Seller's reservation price

Solutions

Expert Solution

Buyer's reservation price less seller's reservation price

Since the good is yet to be traded, the profit of that good can not be calculated. So, we have to use reservation price of the buyer and the seller. Cash-on-the-table formula is the unrealized profit which is the difference between buyer's reservation price and seller's reservation price.

Rahul Sunny answered 1 year ago

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