Imagine that there are 5 buyers (B1,...,B5) with maximum willingness to pay as follows:
B1 = $5 B2 = $4 B3 = $3 B4 = $2 B5 = $1
Imagine that there are 5 sellers (S1,...,S5) with minimum selling prices as follows:
S1 = $5 S2 = $4 S3 = $3 S4 = $2 S5 = $1
I now present two hypothetical situations:
SITUATION 1: Each buyer is matched to the seller with the corresponding price.
In this case, the quantity traded = 5 units
SITUATION 2: Match B1 with S5, B2 with S4, B3 with S3, B4 with S2 and B5 with S1.
In this case, the quantity traded is equal to 3 units since the last two trades cannot happen.
DISCUSSION AND QUESTION
Obviously, these are two extreme situations. However, it seems to highlight an interesting point, namely, what assumptions do we have to make about "reserve prices" of buyers and sellers, and the way they interact with each other, in order for us to be able to calculate the equilibrium point? In other words, there seems to be more than meets the eye with the idea of calculating the equilibrium point from the supply and demand curves alone.