4 ms·
Basically the sellers end up bidding for the opportunity to sell. So basically some sellers won't be willing to sell below 89, more won't be willing to sell bel
by chris11 18y ago
Basically the sellers end up bidding for the opportunity to sell. So basically some sellers won't be willing to sell below 89, more won't be willing to sell below 88, and even more won't be willing to sell be 87. And it works the other way too, so the lower the price gets, the more people are willing to buy. So theoretically, when the number of buyers equals the number of sellers, transactions end up occurring. This is assuming that the market is efficient, which isn't always the case.
If there were 1000 sellers, the price would drop even lower, because there is more competition among the sellers.
- jibiki 18y agoBy this reasoning, equally valid answers would be $0.01 and $90.99.
- trjordan 18y agoThe point of the question is that there is no mathematically "right" answer. The interviewer knows the answer from experience, and (s)he's testing two things: whether the interviewee's intuition on the market is right, and, if not, how well the interviewee takes to being corrected. Your answers are "right", in that they are possible, but they are not the numbers the interview wants to hear.
- jibiki 18y agoThat makes more sense. I thought there was some obvious game theory principle I was missing, since somebody commented that they could answer the question without knowing anything about trading.