Suppose there are two consumers in the market for a good and their demand functions are as follows: d 1 (p) = 20 – p for any price less than or equal to 20, and d 1 (p) = 0 at any price greater than 20. d 2 (p) = 30 – 2p for any price less than or equal to 15 and d 1 (p) = 0 at any price greater than 15. Find out the market demand function.

Question

Philoid · Accepted Answer

d₁(p) = 20 – p for any price less than or equal to 20, and d1(p) = 0 at any price greater than 20.

For Price ≤ 20

Market Demand = 2 (20 – p)

= 40 – 2p

For Price > 20

Market Demand = 2 (0)

= 0

Therefore, market demand function is

40 – 2p if Price ≤ 20

0 if Price > 20

d₂(p) = 30 – 2p for any price less than or equal to 15 and d1(p) = 0 at any price greater than 15.

For Price ≤ 15

Market Demand = 2 (30 – 2p)

= 60 – 4p

For Price > 15

Market Demand = 2 (0)

= 0

Therefore, market demand function is

60 – 4p if Price ≤ 15

0 if Price > 15