The Following Table Displays the Reservation Values of Eight Buyers

question 92

Multiple Choice

The following table displays the reservation values of eight buyers and eight sellers, who each want to buy or sell a calculator. You are in charge of deciding which buyer trades (or not) with which seller at what price as you see fit. You could prescribe different prices to each pair of a buyer and a seller.

-Refer to the table above.Suppose you decided that Buyer 1 and Seller 1 trade at the price that is exactly halfway between their reservation values.Also Buyer 2 and Seller 2,Buyer 3 and Seller 3,Buyer 4 and Seller 4,and Buyer 5 and Seller 5 do the same.The outcome will be ________.Buyer ________ has the largest net benefit of ________.Buyer ________ has the smallest net benefit of ________.

• A) efficient; 1; $9; 5; $0
• B) efficient; 1; $18; 5; $0
• C) efficient; 1; $18; 5; $12
• D) inefficient; 1; $12; 5; $12

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Definitions:

Admission of New Partners

The process through which a new individual is accepted into a partnership, often involving changes to the partnership agreement.

Withdrawals

Money taken out from a bank account or the act of removing assets from a business by the owner for personal use.

Premium for Admission

An additional charge over the regular price for entry into an organization, service, or area typically offering greater benefits.

Bonus

A bonus is a form of additional compensation paid to an employee above their normal wage, often as a reward for reaching specific performance targets or for exceptional work.