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InterviewSolution
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Suppose there are 20 consumers for a good and they have identical demand functions : d(p) = 10 -3p for any price less than or equal to (10)/(3) and d_(1)(p) 0 at any price greater than (10)/(3). What is the market demand funciton ? |
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Answer» SOLUTION :It can be seen from the given DEMAND functions, that 20 consumer do not WANT to demand the goods at any PRICE greater than or equal to `(10)/(3)`. All of them demand only at a price of less than Rs `(10)/(3)`. For a single consumer d[P] = 10 - 3P For 20 consumers, `d_("market")[P] = [10 xx 3P] xx 20 = 20 - 60 P`, for price `(10)/(3)` and`d_("market")[P] = 0`, ......, for price `gt = (10)/(3)` |
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