The following table displays the reservation values of buyers and sellers in the market for notebooks, where each individual either wants to buy or sell one notebook.

-Refer to the table above.If the market for notebooks is perfectly competitive,the equilibrium quantity is ________.
A) 2 units
B) 3 units
C) 4 units
D) 5 units

Question

The following table displays the reservation values of buyers and sellers in the market for notebooks, where each individual either wants to buy or sell one notebook.
 
-Refer to the table above.If the market for notebooks is perfectly competitive,the equilibrium quantity is ________.
A) 2 units 
B) 3 units 
C) 4 units 
D) 5 units

Quizplus · Accepted Answer

In a perfectly competitive market, the equilibrium quantity is where the supply and demand curves intersect. In this case, the demand curve intersects the supply curve at a quantity of 4 units. At this quantity, both buyers and sellers are willing to trade at a price of $3 per unit, which is exactly the market price. Therefore, the equilibrium quantity is 4 units.

The Following Table Displays the Reservation Values of Buyers and Sellers