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Suppose There Are 11 Buyers and 11 Sellers,each Willing to Buy

Question 68

Multiple Choice

Suppose there are 11 buyers and 11 sellers,each willing to buy or sell one unit of a good,with values {$14,$13,$12,$11,$10,$9,$8,$7,$6,$5,$4,}.Assume no transaction costs and a competitive market.If there is a market maker in this market.What is the profit maximizing bid-ask spread per unit for a market maker?


A) ​$6 bid;$12 ask
B) $7 bid;$11 ask
C) $8 bid;$10 ask
D) ​$9 bid;$9 ask

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