Asked by Amanda Jones on Jul 04, 2024
Verified
A market maker faces the following demand and supply for widgets.Eleven buyers are willing to buy at the following prices: $15,$14,$13,$12,$11,$10,$9,$8,$7,$6,$5.Eleven sellers are also willing to sell at the same prices.What is the equilibrium price in the market without the market maker
A) $12
B) $11
C) $10
D) $9
Equilibrium Price
The price at which the quantity of goods supplied matches the quantity of goods demanded in a market, leading to market stability.
Market Maker
A firm or individual who actively quotes both buy and sell prices for financial instruments, contributing to liquidity and efficiency in the markets.
Demand
The quantity of a product or service that consumers are willing and able to purchase at various prices during a given period.
- Investigate the impact of supply and demand forces on the stabilization of market prices and equilibrium.
Verified Answer
ZK
Zybrea KnightJul 05, 2024
Final Answer :
C
Explanation :
The equilibrium price is where the quantity demanded equals the quantity supplied. At $10, five buyers are willing to buy at or above that price, and five sellers are willing to sell at or below that price, making it the equilibrium price.
Learning Objectives
- Investigate the impact of supply and demand forces on the stabilization of market prices and equilibrium.