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Suppose there are two consumers in the market for a good and their demand functions are as follows: d1(p) = 20 - p for any price less than or equal to 20, and d1(p) = 0 at any price greater than 20. d2(p) = 30 - 2p for any price less than or equal to 15 and d1(p) = 0 at any price greater than 15. Find out the market demand function. |
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Answer» d1(p) = 20 - p {p≤ 20, p > 20 d2(p) = 30 - 2p{p ≤ 15, p > 15 For price less than Rs 15 (p ≤ 15) = 20 – p + 30 – 2p Market demand = d1(p) + d2(p) = 20 – p + 0(∵ for p > 15, d2(p) = 0) Market demand = d1(p) + d2(p) = 0 + 0(∵ for p > 10, d1(p) = 0, d2(p) = 0) = 0 Thus, market demand = 50 - 3p if p ≤ 15 = 20 - p if 15 < p ≤ 20 = 0 if p>20 |
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