Discuss the below:
Q: Use the fig below: demand with zero transaction costs is Q1s =50-P and supply is Qs = -7 +2P
A Verify all of the prices and quantities calculated in the discussion.
B Now assume that intermediaries come from a competitive market with an equilibrium price of $8 per unit for their services, that is any buyer or seller who wants and intermediary's services must pay $8 for them. What is the maximum per unit that sellers are willing to pay intermediaries if hiring them saves buyers $8 in transaction costs?
C Does your answer to above Change if buyers pay $8 per unit to the intermediary but sellers offer to rebate part of that expense to buyers?
