a) which trader get filled and for what volumeb)what will be the market price of power ate each mode after the auctionc) Determine economic surplus for each trader One complication in Nodal auctions is that traders can either buy or sell using "outright" orders (Traders 1and 5) or "spread" orders (Traders 2, 3, and 4). In an outright order, the trader wants to buy or sell asingle product at some price. In a spread order, a trader wants to simultaneously buy AND sell the samevolume of two different products and will only transact if they can get both products. A spread order meansthat the trader does not care about the absolute price of either product, only that the price differencebetween the products they are buying and those they are selling is less than their spread order price.The notation of the bid diagram is as follows: an arrow into a product means the trader wants to buy thatproduct and an arrow out means the trader wants to sell that product. Thus Trader 2 wants to buy Product Cand sell Product A, looking for the difference (i.e. price of C - price of A) to be <= $15/lot.ORDERSTrader 1 (outright)3,000 lotsTrader 5 (outright)20,000 lots@ $50/lot@ $30/lotTrader 4 (spread)5,000 lots@ $35/lotProduct AProduct BTrader 2 (spread)Product CTrader 3 (spread)5,000 lots@ $25/lots2,000 lots@ $15/lots Anglyr's or the diggramThador 1 buge Piechuck ATrado a buyu Piochuck C andselly ProdudAProducdTrador 3 buye Preduct B and velloProduct CB and delTradobun Piodud B and velfroduck Aroder 5 sello Product R

Trader:A dealer is a person or entity that engages in buying and/or selling financial devices,…

Answered: trader | bartleby

Business

Economics

trader

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter18: Auctions

Section: Chapter Questions

Problem 9MC

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Question

a) which trader get filled and for what volume

b)what will be the market price of power ate each mode after the auction

c) Determine economic surplus for each trader

One complication in Nodal auctions is that traders can either buy or sell using "outright" orders (Traders 1
and 5) or "spread" orders (Traders 2, 3, and 4). In an outright order, the trader wants to buy or sell a
single product at some price. In a spread order, a trader wants to simultaneously buy AND sell the same
volume of two different products and will only transact if they can get both products. A spread order means
that the trader does not care about the absolute price of either product, only that the price difference
between the products they are buying and those they are selling is less than their spread order price.
The notation of the bid diagram is as follows: an arrow into a product means the trader wants to buy that
product and an arrow out means the trader wants to sell that product. Thus Trader 2 wants to buy Product C
and sell Product A, looking for the difference (i.e. price of C - price of A) to be <= $15/lot.
ORDERS
Trader 1 (outright)
3,000 lots
Trader 5 (outright)
20,000 lots
@ $50/lot
@ $30/lot
Trader 4 (spread)
5,000 lots
@ $35/lot
Product A
Product B
Trader 2 (spread)
Product C
Trader 3 (spread)
5,000 lots
@ $25/lots
2,000 lots
@ $15/lots

Anglyr's or the diggram
Thador 1 buge Piechuck A
Trado a buyu Piochuck C and
selly ProdudA
Producd
Trador 3 buye Preduct B and vello
Product C
B and del
Trado
bun Piodud B and vel
froduck A
roder 5 sello Product R

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