ECON 2010 week 07 homework

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1. Consider the following table of values and costs

Q V MV TC MC
0 0 - 0 -
1 10 10 1
2 18 8 2 i
E
3 23 E 3
4
5
25
↳ 1
14
9
5

(a) Complete the table

(b) How many units should be traded if the outcome is efficient? What are the total
gains from trade in this case?
(c) For what range of prices would the buyer want to buy the number of units found
above? For what range of prices would the seller want to sell the number of units
found above?

where

because that is the

last quantity
b) 3 units

music. The gains

from trade is presented by

18
V-Tc 23-5
=
or

44[2 5]
2) Buyer between ,

seller between
44[3 2] ,

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