Table 8.1
$$\begin{array} { | c | c | c | }
\begin{array} { l }
\text { Seller A Offer Price } \
( \$ )
\end{array} & \text { Quantity (shares) } & \begin{array} { l }
\text { Stock Market Price } \
\text { for Google } ( \$ )
\end{array} \
\hline 900 & 50 & 950 \
\hline 950 & 100 & 950 \
\hline 1,000 & 150 & 950 \
\hline
\end{array}$$
-Refer to Table 8.1.The perfectly competitive for shares of Google stock is composed of millions of buyers and sellers on the stock market.What is the market equilibrium price for Google stock?

Question

Table 8.1
 $$\begin{array} { | c | c | c | } 
\begin{array} { l } 
\text { Seller A Offer Price } \
( \$ )
\end{array} & \text { Quantity (shares) } & \begin{array} { l } 
\text { Stock Market Price } \
\text { for Google } ( \$ )
\end{array} \
\hline 900 & 50 & 950 \
\hline 950 & 100 & 950 \
\hline 1,000 & 150 & 950 \
\hline
\end{array}$$
-Refer to Table 8.1.The perfectly competitive for shares of Google stock is composed of millions of buyers and sellers on the stock market.What is the market equilibrium price for Google stock?

Quizplus · Accepted Answer

The market equilibrium price is determined by the intersection of the supply and demand curves. In this case, there is no information given about the demand curve, but we can see that for each quantity of shares being offered by Seller A, the offer price is higher than the stock market price. This implies that there is an excess supply of shares at each of these prices. Therefore, the market equilibrium price must be lower than any of these prices, and the only option given that meets this criteria is B, $950.

Table 81 -Refer to Table 8