Here are the buyer and seller values from an experiment with 12 potential buyers

Question

Here are the buyer and seller values from an experiment with 12 potential buyers of used textbooks and 12 potential sellers.

Here are the buyer and seller values from an experiment with 12 potential buyers of used textbooks and 12 potential sellers. Now suppose that the professor imposes a price floor of $15 per book. Sellers are pleased because they think that they will be able to get more money this way. Together, how much cash would the sellers receive from selling their books now? (Assume, as always, that people who are indifferent go ahead and trade.)

Explanation / Answer

45$

Price floor means that minimum amount that is put to purchase a book.

Simply multiply the amount the sellers are charging by the number of books .

For example: Think that before the price floor was set, sellers were charging 12 $ per book, but now they has been a price floor which leads them to charge $ 15 per book thus, they receive $ 15 in cash for each book sold and a profit of $ 3 more than what they were selling at.

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