Verify all of the prices and quantities calculated in the discussion.BNow assume that intermediaries...

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Verify all of the prices and quantities calculated in the discussion.BNow 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?CDoes your answer to Question 16a Change if buyers pay $8 per unit to the intermediary but sellers offer to rebate part of that expense to buyers?
	
Document Preview: Question 16 Figure 8-9For Figure 8-9, 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 Question 16a Change if buyers pay $8 per unit to the intermediary but sellers offer to rebate part of that expense to buyers?

Robert · Accepted Answer

Verify all the prices and quantities calculated in the discussion. 
Equate demand with supply- the relevant demand curve is D1 
50-P = -7+2P
57 = 3P
P=19
Q= 50-19=31—the values match those shown in diagram.
With transaction costs the new  demand curve is
 D2: 50-p-18 = 32-P
P=13 
Q= 32-13=19
B.

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...

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