Each Saturday there is a marketplace in the town of Tchotchka at which it is possible to buy githerments. These items are demanded by consumers and the market each week attracts a gathering of willing suppliers looking for customers and a group of buyers looking to take home a few githerments to enjoy during the week ahead.

To establish a thriving githerment market, the marketplace recruits an auctioneer (trained as an “invisible hand” of course) who looks to set the appropriate price.

Each week the auctioneer gathers sellers on the left and buyers on the right.

This week we know, but the auctioneer does not, that each of the sellers standing to the left will sell the following amounts at the following price levels:

Seller	Quantity willing to sell	For at least ($) per unit
Ahmed	210	37
Brian	150	44
Caroline	275	43
Delia	150	36
Echo	190	35
Freda	200	42
George	200	39
Hamid	250	41
Israel	100	34
Jose	100	45

We also know, but the auctioneer does not, that the buyers standing on the right will buy the following amounts at the following prices:

Buyer	Quantity willing to buy	For no more than ($) per unit
Keiran	100	47
Laura	200	46
Micah	250	45
Norah	200	43
Olivia	150	42
Paris	200	41
Quentin	150	39
Reza	100	38
Salina	200	37
Talin	125	35

As the auctioneer calls out prices, the buyers and sellers raise signs indicating how much they are willing to buy or sell.

What happens?

1. Explain the process.
2. Draw a diagram.
3. Explain how the auctioneer achieves his objective.
4. Give the size of the githerment market for this Saturday.

Answer rating: 100% (QA)

1 The auctioneer will start from the lowest price and would ... View the full answer