Scenario: The table below shows the reservation values of ten buyers and a seller for a loaf of bread. Each buyer would buy at most one loaf and the seller can make up to ten loaves. Initially trades happen under the market mechanism with each agent making a decision according to the market price and his or her own reservation value. Then the government imposes a price ceiling of $1.00 per unit.
-Refer to the scenario above.Suppose that,after the price ceiling is imposed,the seller uses a lower quality flour that reduces his marginal cost by $0.50 for each loaf.Buyers suspect that the quality may be lower,and their reservation value falls by $0.25.At the legal price,there will be ________.
Definitions:
Block Transactions
Large-scale securities trades on stock markets, usually involving at least 10,000 shares or bonds.
NYSE
The New York Stock Exchange, one of the world's largest stock exchanges by market capitalization, located in New York City.
Stop-buy Order
A trading instruction used to purchase a security when it reaches a price above its current market price, typically to limit a loss on a short sale.
Short Sellers
Investors who borrow shares of a stock they expect to decrease in value, sell them, and then plan to buy them back at a lower price to return to the lender, profiting from the decline.
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