Determine the maximum per unit

Assignment Help Business Economics

Reference no: EM1374145

For Figure 8-9, demand with zero transaction costs is Q1 D = 50 - P and supply is Qs = -7 +2P.
a. Verify all the values and quantities computed in the discussion.
b. Now suppose that intermediaries come from a competitive market with an equilibrium price of $8 per unit for their services, that is, any buyer or seller who wants an intermediary's services must pay $8 for them. Determine the maximum per unit that sellers are willing to pay intermediaries if hiring them saves buyers $8 in transaction costs?
c. Does your answer to Question 16a change if buyers pay $8 per unit to the intermediary but sellers offer to rebate part of that expense to buyers?

Reference no: EM1374145

Questions Cloud

Differences between shortages and scarcity : Describe the differences between shortages and scarcity. In answering this question you should think difference between the short run and the long run in economic analysis.

How many units did the company produce through the year : If production cost is $11 per unit under absorption costing each year, then how many units did the company produce through the year?

Explain what do these numbers tell you about the price level : Explain what do these numbers tell you about the price level in these three years and Compute the inflation rates for the years ended June 2007 and June 2008.

Illustrate what would be the minimum cycle time : Illustrate what would be the minimum cycle time that could be achieved if the production was split into 2 lots of 500 parts each. Illustrate what would be the minimum cycle time and inventory levels if the production is broken down into 4 lots of 2..

Determine the maximum per unit : Verify all values and quantities computed in the discussion. Now suppose that intermediaries come from a competitive market with an equilibrium price of $8 per unit for their services,

Create journal entries to record the issuance : Create journal entries to record the issuance of 100,000 shares of common stock at $20 per share for each of the subsequent independent cases

What is the percentage change in the productivity from april : In April the store also had seven part-time workers at 10 hours per week and in May the store had nine part-timers at 15 hours per week. Using sales dollars as the measure output, illustrate what is the percentage change in the productivity from A..

Define the sociological reasons that gender : Define the sociological reasons that gender, race and age discernment occur in American society. Describe whether you think these forces will diminish or developed more prevalent in the near future.

Describe the opportunity set : Describing the opportunity set, notice there is a portfolio that has the lowest standard deviation. This is the minimum variance portfolio. Evaluate what are the portfolio weights, expected return, and standard deviation of this portfolio?

User Account

All Pages