Double Auction Market Questions

1 Economics Name Instructor Institution Dated 2 A. For you to understands these concept I will start by defining the terms used in this question the will explain and interpret these question for you to understand it easily. Observed price. this simply means the actual price that is confirmed by the member states of a given region. Prices in posted offer. These are prices in which the sellers and buyers are willing to sell and buy a given commodity. Double auction market. Refers to when the asking price of the seller matches with the buyers price and trading process continues at that price. in this case the the market does not allow direct conversation between the buyers and sellers instead they occur in OTC(over the counter) trades which is done directly without supervision.

The answer to this question is as the number of sellers drops to 2 there will be less supply hence the prices of the posted offer will increase. 3 B. As the number of sellers drops to one monopoly seller means the quantity available reduces hence there will be less supply. C. Part (B) explains the first experimental principle simply because the number sellers will drop to one monopoly seller and beyond that their be no surplus completely hence at one monopoly seller is considered as the first experimental principle.

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