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Suppose There Are 11 Buyers and 11 Sellers,each Willing to Buy

question 67

Multiple Choice

Suppose there are 11 buyers and 11 sellers,each willing to buy or sell one unit of a good,with values {$14,$13,$12,$11,$10,$9,$8,$7,$6,$5,$4,}.Assume no transaction costs and a competitive market.At the optimal bid-ask spread,how many transactions would the market maker undertake in this market


Definitions:

Premarital Contract

An agreement between individuals planning to marry that outlines the management of their assets and financial matters upon marriage.

Informal Contract

A contract that requires no formalities. Also called simple contract.

Formal Contract

A contract that must have a special form or must be created in a specific manner.

Simple Contract

A contract that is not a formal contract. Also called an informal contract.

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