The following table displays the reservation values of 10 sellers and 10 buyers in a market for cameras where each individual wants to buy or sell one camera.

a)What is the equilibrium price and quantity of cameras?
b)What is the social surplus when four highest-value buyers trade with four lowest-cost sellers?
c)What is the social surplus when eight highest-value buyers trade with eight lowest-cost sellers?
d)What is the highest possible social surplus in the market? At what quantity does it occur?

Question

The following table displays the reservation values of 10 sellers and 10 buyers in a market for cameras where each individual wants to buy or sell one camera.
  
a)What is the equilibrium price and quantity of cameras?
b)What is the social surplus when four highest-value buyers trade with four lowest-cost sellers?
c)What is the social surplus when eight highest-value buyers trade with eight lowest-cost sellers?
d)What is the highest possible social surplus in the market? At what quantity does it occur?

Quizplus · Accepted Answer

The Answer of The following table displays the reservation values of 10 sellers and 10 buyers in a market for cameras where each individual wants to buy or sell one camera.
  
a)What is the equilibrium price and quantity of cameras?
b)What is the social surplus when four highest-value buyers trade with four lowest-cost sellers?
c)What is the social surplus when eight highest-value buyers trade with eight lowest-cost sellers?
d)What is the highest possible social surplus in the market? At what quantity does it occur?

The Following Table Displays the Reservation Values of 10 Sellers