For Figure 8-9 GRAPH BELOW, demand with zero transaction costs is Q( to the 1st
ID: 1234362 • Letter: F
Question
For Figure 8-9 GRAPH BELOW, demand with zero transaction costs is Q( to the 1st power)D= 50-P and supply is Qs=-7+ 2P.A.Verify all the prices and quantities calculated in the discussion.
B Now assume that intermediaries come from a competitive market with and equilibrium price of $8 per unit for their services, that is, any buyer or seller who wants an intermediary For Figure 8-9 GRAPH BELOW, demand with zero transaction costs is Q( to the 1st power)D= 50-P and supply is Qs=-7+ 2P.
A.Verify all the prices and quantities calculated in the discussion.
B Now assume that intermediaries come from a competitive market with and equilibrium price of $8 per unit for their services, that is, any buyer or seller who wants an intermediary
Explanation / Answer
In this case, set Qd=Qs -7+2P=50-P 3P=57 P=57/3 Plug P into either function to get Q 50-(57/3)=31 In this case, they are willing to pay 57/3 dollars per unit which is well above the 8 Hope this helps
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