Assume that there is a fruit seller who has 20 kilograms of apples to be sold and he wants to fix a price so that all the apples are sold. There are three customers in the market and their individual demand functions are : D1 = 25-1P: D2 = 20-0.5P ; D3=15-0.5P. (1)Determine the market demand = = equation for the fruit seller. (2)At what price can the he sell all the apples. (3)What would be the demand of each consumer at the given price?
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The Policy Question: Should Your City Charge More for Downtown Parking Spaces?
Major cities have a significant number of parking spaces on public streets. In congested areas, such as downtowns, street parking is usually priced and limited in duration. Cities meter downtown parking for many reasons, including to raise revenue, ensure the frequent turnover of customers for local merchants, and ensure the availability of parking spot for those looking for parking. But how much should a city charge for parking in order to raise revenue or ensure available spots? The answer depends on understanding the demand for parking.
Demand is a natural next topic after the consumer choice problem of maximizing utility among competing bundles of goods, which we studied in Module 4. We saw in Module 4 that the solution to the consumer choice problem gives us, among other things, the individual demand functions. These functions tell us how much the individual consumer will demand of each good in order to maximize utility for any set of prices and income. And by taking into account all of the individual demands, we can come up with an overall market demand for a good