Question

Suppose you decide to follow in Vernon Smith's footsteps and conducted your own experiment with your friends. You give out 10 cards, 5 cards to buyers with the figures for willingness to pay of $1, $2, $3, $4, and $5, and 5 cards to sellers with the amounts for costs of $1, $2, $3, $4, and $5. The rules are the same as Vernon Smith implemented. a. Draw the supply and demand curves for this market. At a price of $3.50 how many units are demanded and supplied

Answer 1

Answer:

Answer is given below.

Explanation:

The given graph shows the demand and supply curves.

At the price of $3.50, we can see that the demand will be less than 3 units, which means, that the demand will be only 2 units.