a) A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5. Eleven sellers are also willing to sell at the same prices. What is the equilibrium price in the market without the market maker?
b) A small town in West Texas has one gas station. If the price of oil increases, the price of gas that the station charges will most likely? Explain your answer.
c) If a firm in a perfectly competitive industry is experiencing higher than normal returns, in the long-run what would you expect to happen?
d) What would happen to a firm in a perfectly competitive industry experiencing higher than normal returns in the long-run? Explain your answer.
e) ?In the market for used cars we have 10 sellers, willing to sell at the prices of $1000, $2000, $3000, $4000, $5000, $6000, $7000, $8000, $9000, $10000. What could the market price be in order to induce five sellers to offer their cars for sale?