Suppose that all of the numbered diamonds and spades from a deck of cards (excluding Ace, King, Queen, and Jack) are used to set up a market. The diamonds determine demands, e.g., a 10 represents a buyer with a redemption value of $10. Similarly, the spades determine supply. There are nine buyers and nine sellers, each with a single card.
(a) Graph supply and demand, and derive the competitive price and quantity predictions.
(b) What is the predicted eect of removing the 3, 4, and 5 of spades.