Suppose there are 20 consumers for a good and they have identical demand functions. D(p) = 10 − 3p for any price less than 10/3 or equal to and d1(p) = 0 at any price greater than 10/3 . What is the market demand function?
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d(p) = 10 - 3p if p ≤ 10/3 d1(p) = 0 if p > 10/3 Market demand = Summation of demand of all the consumers in the market For price ≤ 10/3 Market demand = 20∑d(p) (Since consumers have identical demand curve) = 20 x (10 - 3p) = 200 - 60p For price > 10/3 Market demand = 20 x d1(p) = 20 x 0 = 0 Market demand function = 200 - 60p{if p ≤ 10/3, if p > 10/3 = 0
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d(p) = 10 - 3p if p ≤ 10/3 d1(p) = 0 if p > 10/3 Market demand = Summation of demand of all the consumers in the market For price ≤ 10/3 Market demand = 20∑d(p) (Since consumers have identical demand curve) = 20 x (10 - 3p) = 200 - 60p For price > 10/3 Market demand = 20 x d1(p) = 20 x 0 = 0 Market demand function = 200 - 60p{if p ≤ 10/3, if p > 10/3 = 0
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