The demand curve of two consumers are $d_1(p)=10-p$ and $d_2(p)=15-p.$ Find the market demand when price is 16 for the commodity.
Answer & explanation
Correct answer: option 4
The correct answer is Option 4: 0
The market demand curve represents the demand of all consumers in the market
Therefore Market Demand= $d_1(p) + d_2(p)$
Price (p)= 16
- d₁(16) = 10 − 16 = −6
- d₂(16) = 15 − 16 = −1
Thus, Market Demand= (-6) + (-1) = -7
When price is too high, consumers simply demand 0 units, not negative units
So, the correct answer is: 0