COMM 220 Lecture Notes - Lecture 1: Economic Equilibrium, Economic Surplus
7 Apr 2017
School
Department
Course
Professor
Document Summary
Tells you you"re going to be a buyer or seller. You"re also given the redemption value on a worthless piece of metal. Try to buy low, let"s say 11$, you"ll get 3$ back as buyer a. If you can sell token for greater than cost, you can keep the difference. Someone will collect offers, see if there"s an equilibrium (auctioneer) price. Those to the left will get the trade in the market for that equilibrium price. If you plot the points, you get the supply and demand. Buyers are going to be lower, sellers are going to be higher but if you look at this graph, there will never be more than 4 tokens sold/bought. Sellers and buyers to the left of the equilibrium are extracting the best value. Sellers that are willing to sell low, and buyers that are willing to pay higher. Tastes are undeterminable tastes are uniformly distributed.
