Ask Question
BusinessBusiness
26 January, 02:23

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. If the market maker is free to choose the number of transactions he can make, what is his maximum profit

+4
Answers (1)
  1. 26 January, 06:10
    0
    maximum profit ($30 in total) is obtained by selling 5 units

    Explanation:

    if the market maker buys and sells one unit, his/her profit = $15 - $5 = $10 if the market maker buys and sells two units, his/her profit = $10 + ($14 - $6) = $18 if the market maker buys and sells three units, his/her profit = $18 + ($13 - $7) = $24 if the market maker buys and sells four units, his/her profit = $24 + ($12 - $8) = $28 if the market maker buys and sells five unit, his/her profit = $28 + ($11 - $9) = $30

    the maximum profit per unit is obtained by selling only 1 unit, but the total maximum profit is obtained by selling 5 units.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
When Palm, Inc. acquired its 100% investment in Star Co., a foreign entity, the excess of cost over book value was 10,000 FC. This excess was traceable to a 10-year patent. Assume the foreign entity's local currency is its functional currency.
Answers (1)
If a monopolist increases quantity by one unit, but sells the increased output at a slightly lower price: A. all the previous units, which used to sell at a higher price, now sell for more. B.
Answers (1)
On October 1, 2018, Swifty Company places a new asset into service. The cost of the asset is $125000 with an estimated 5-year life and $30500 salvage value at the end of its useful life.
Answers (1)
When a lender requires tax and/or insurance amounts to be deposited with the lender by placing the monies in an escrow account, a "Budget Mortgage or Deed of Trust" occurs. These escrow accounts may also be referred to as what?
Answers (1)
To ensure a safe environment its important to
Answers (2)
New Questions in Business
Suppose the exchange rate between the US and Japan changes from $1=100 yen to $1=110 yen. What would happen to the prices of American goods in Japan?
Answers (1)
What is the major difference between owner-occupied housing and cooperative housing?
Answers (1)
What is a car loan? a way to pay in advance for using a car for a given time period a way to pay for a car that is dependent on the number of miles you drive a way to borrow money from a bank or financial institution to pay for a car?
Answers (1)
Horton Industries' shareholders' equity included 140 million shares of $1 par common stock and a balance in paid-in capital - excess of par of $1,120 million.
Answers (1)
Why do price discrimination and the existence of slightly different variants of the same product tend to go hand in hand? By introducing slightly different variants of the product, firms that price discriminate are able to
Answers (1)
Home » Business » 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.
Sign Up Forgot Password?