(Adapted from ongoing joint work with Weiwei Wang and Jianxin Zheng.) Similar to the previous problem, but consider that the costs of the two units of seller 1 are 1 and 15, and the costs of the two units of seller 2 costs are 30 and 30. Illustrate this market with a supply and demand graphic similar to Figure 1. Find the competitive prices, competitive allocations and total surplus. What difference do you perceive between this and the previous market? Do you think that competitive prices are a good prediction of market behavior in this market?

30 28 supply 26 24 = = =competitive puces_ _ _ _ thousand US$ 18 16 demand 14 12 10 2 3 4 5 6 7 8 9 10 traders Figure 1: Supply and demand for tractors, and competitive prices 21