Question

There are only 3 consumers (X, Y and Z) in a market and there demand functions are given as : `Q_(X) = 30 - 2P , Q_(Y) = 40 - 3P , Q_(Z) = 50 - 4P`
From the given individual demand functions, determine the market demand function. Also, calculate the market demand at a price Rs. 10 per unit.

Answer 1

Market demand function can be determined through summation of individual depand function, i.e.,
`Q_(MD)=Q_(X)+Q_(Y)+Q_(Z)=(30-2P)+(40-3P)+(50-4P)=120-9P`
Market Demand at a price of Rs. 10 per unit : `Q_(MD)=120-9P=120-9xx10=30` units.