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Unformatted text preview: Suppose that instead eBay imposed a fee of $3 per unit on the seller, and a fee of $7 per unit on the buyer. How much would the buyer pay the seller? ANSWER: How the $10 fee is split between the buyer and the seller has no effect on the effective price the consumer pays. So if the fee the buyer pays eBay is $7, then in equilibrium the price the buyer pays in total must remain at $50; therefore the amount the buyer pays the seller is $50-$7=$43....
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- Spring '08