$$\begin{array}{l}\begin{array} { l r }
\text { Price (\$}&\text {) Number of Shares Bid }\\hline

3.00 & 100,000 \
3.25 & 100,000 \
3.50 & 150,000 \
3.75 & 100,000 \
4.00 & 40,000 \
4.25 & 80,000 \
4.50 & 150,000 \
4.75 & 65,000
\end{array}
\end{array}$$ Bejeweled, a chain of crafting shops, is selling 500,000 shares in an auction IPO. At the end of the bidding period they have received the bids shown above. Which of the following is closest to the price at which the shares will be offered?

Question

$$\begin{array}{l}\begin{array} { l r } 
\text { Price (\$}&\text {) Number of Shares Bid }\\hline

3.00 & 100,000 \
3.25 & 100,000 \
3.50 & 150,000 \
3.75 & 100,000 \
4.00 & 40,000 \
4.25 & 80,000 \
4.50 & 150,000 \
4.75 & 65,000
\end{array}
\end{array}$$ Bejeweled, a chain of crafting shops, is selling 500,000 shares in an auction IPO. At the end of the bidding period they have received the bids shown above. Which of the following is closest to the price at which the shares will be offered?

Quizplus · Accepted Answer

The shares will be offered at the price that clears the market, which is the price at which the number of shares bid is equal to the number of shares offered. In this case, the number of shares offered is 500,000. The number of shares bid at $3.50 is 150,000, which is the closest to 500,000. Therefore, the shares will be offered at $3.50.

Bejeweled, a Chain of Crafting Shops, Is Selling 500,000 Shares