Suppose there are 11 buyers and 11 sellers, each willing to buy or sell one unit of a good, with values {$14, $13, $12, $11, $10, $9, $8, $7, $6, $5, $4,}. Assume no transaction costs and a competitive market. If there is a market maker in this market. What is the profit maximizing bid-ask spread per unit for a market maker?
a. $6 bid; $12 ask
b. $7 bid; $11 ask
c. $8 bid; $10 ask
d. $9 bid; $9 ask
a
You might also like to view...
Why is the money multiplier in the United States smaller than the inverse of the required reserve ratio?
What will be an ideal response?
When an investor buys a corporate bond, the ________ the bond is a loan to the corporation
A) interest on B) dividend payment on C) coupon payment on D) face value of
The law of supply states that the quantity supplied of a good and
a. the price of a key input are inversely related b. its price are inversely related c. the price of a key input are positively related d. its price are positively related e. the price of an alternate good are positively related
Based on these graphs, in both cases _____.
a. RGDP increases
b. RGDP decreases
c. price level increases
d. price level decreases