The Tables Below Show Reservation Values of Buyers and Sellers

question 77

Multiple Choice

The tables below show reservation values of buyers and sellers in a market. There are three buyers and two sellers. Each buyer's reservation values for the fourth unit and above are negative, and each seller can produce at most four units.

-Refer to the tables above.How many units does each buyer buy,and how many units does each seller sell at the equilibrium?

• A) Buyer 1: 2 units, Buyer 2: 2 units, Buyer 3: 2 units; Seller 1: 2 units, Seller 2: 3 units
• B) Buyer 1: 2 units, Buyer 2: 1 unit, Buyer 3: 2 units; Seller 1: 3 units, Seller 2: 2 units
• C) Buyer 1: 1 unit, Buyer 2: 2 units, Buyer 3: 2 units; Seller 1: 2 units, Seller 2: 3 units
• D) Buyer 1: 2 units, Buyer 2: 1 unit, Buyer 3: 2 units; Seller 1: 2 units, Seller 2: 3 units

Understand the concepts of imperfect competition and how it affects the labor market.

Identify and explain the relationship between marginal product and marginal resource cost.

Analyze the impact of competitive and non-competitive markets on firms' product pricing and labor hiring decisions.

Calculate marginal product and marginal resource cost based on given data.

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