Scenario: The table below shows the reservation values of ten buyers and a seller for a loaf of bread. Each buyer would buy at most one loaf and the seller can make up to ten loaves. Initially trades happen under the market mechanism with each agent making a decision according to the market price and his or her own reservation value. Then the government imposes a price ceiling of $1.00 per unit.

-Refer to the scenario above.Suppose that,after the price ceiling is imposed,the seller serves customers on a first-come,first-served basis.In the hope of getting the good on the cheap,buyers flock to the store and form a line.Buyer 9 is at the top of the queue and is served immediately.Buyer 2 is next and is served after waiting for 15 minutes.Then Buyer 1 is served after waiting for 30 minutes,followed by Buyer 6 (who waited for an hour).Much to their dismay,other buyers were turned down,and the seller shuts the store.If each buyer has an opportunity cost of time equal to $6 per hour,what is the total net benefit to consumers?

Question

Scenario: The table below shows the reservation values of ten buyers and a seller for a loaf of bread. Each buyer would buy at most one loaf and the seller can make up to ten loaves. Initially trades happen under the market mechanism with each agent making a decision according to the market price and his or her own reservation value. Then the government imposes a price ceiling of $1.00 per unit.
 
-Refer to the scenario above.Suppose that,after the price ceiling is imposed,the seller serves customers on a first-come,first-served basis.In the hope of getting the good on the cheap,buyers flock to the store and form a line.Buyer 9 is at the top of the queue and is served immediately.Buyer 2 is next and is served after waiting for 15 minutes.Then Buyer 1 is served after waiting for 30 minutes,followed by Buyer 6 (who waited for an hour).Much to their dismay,other buyers were turned down,and the seller shuts the store.If each buyer has an opportunity cost of time equal to $6 per hour,what is the total net benefit to consumers?

Quizplus · Accepted Answer

The Answer of Scenario: The table below shows the reservation values of ten buyers and a seller for a loaf of bread. Each buyer would buy at most one loaf and the seller can make up to ten loaves. Initially trades happen under the market mechanism with each agent making a decision according to the market price and his or her own reservation value. Then the government imposes a price ceiling of $1.00 per unit.
 
-Refer to the scenario above.Suppose that,after the price ceiling is imposed,the seller serves customers on a first-come,first-served basis.In the hope of getting the good on the cheap,buyers flock to the store and form a line.Buyer 9 is at the top of the queue and is served immediately.Buyer 2 is next and is served after waiting for 15 minutes.Then Buyer 1 is served after waiting for 30 minutes,followed by Buyer 6 (who waited for an hour).Much to their dismay,other buyers were turned down,and the seller shuts the store.If each buyer has an opportunity cost of time equal to $6 per hour,what is the total net benefit to consumers?

Scenario: the Table Below Shows the Reservation Values of Ten