What is the maximum amount you would be willing to pay

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Auctioning Business Licenses: The following table shows the relationship between the number of firms in the market, the market price, the quantity per firm, and the average cost of production.

firms Price Quantity per firm Average Cost
1 $20 38 9
2 18 35 10
3 16 32 11
4 14 29 12
5 12 26 13
6 10 23 14
7 8 20 15

A business license allows a firm to operate the business for one day. The city will auction up to seven business licenses to the highest bidders, and the auctioning licenses will continue as long as someone bids a positive amount for one of the licenses. Assume that each firm can buy only one license. What is the maximum amount you would be willing to pay for the license?

Reference no: EM13203875

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