1.Suppose there are nine sellers and nine buyers, each willing to buy or sell one unit of a good, with values ($60, $50, $45, $40, $35, $30, $25, $20, $15). Suppose there is a single market maker in this market. What is the optimal bid-ask spread?
a.$15 bid; $60 ask
b.$20 bid; $50 ask
c.$25 bid; $45 ask
d.$30 bid; $40 ask
2.Suppose there are nine sellers and nine buyers, each willing to buy or sell one unit of a good, with values ($60, $50, $45, $40, $35, $30, $25, $20, $15). Suppose there is competition among several market makers, and the spread has been forced down to $10. H0w many goods are traded?
a.Five
b.Four
c.Three
d.Two