Question: There are five firms: A, B, C, D, E and firms A and B can produce just one unit of a product at a cost

There are five firms: A, B, C, D, E and firms A and B can produce just one unit of a product at a cost of $2 while Firm C can produce just one unit at a cost of $3, Firm D can produce just one unit at a cost of $4, and Firm E can produce just one unit at a cost of $7. There are five buyers, each of which would like to buy just one unit of the product. Each buyer views the products from all firms as identical. Buyer 1 has a willingness-to-pay (WTP) of $12 for either product, Buyer 2 has a WTP of $10, Buyer 3 has a WTP of $9, Buyer 4 has a WTP of $8, and Buyer 5 has a WTP of $5.

a. What total value will be created? b. What is the contributed value of each player? c. What is the value captured by each player?

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