Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

The Demand equations of the two consumers are given as

$\left.\begin{array}{l}
d 1(p)=10-2 p \\
d 2(p)=20-8 p
\end{array}\right]$

Where d is the demand and p is the price

Calculate the market demand when price is ₹2

Options:

6

4

20

10

Correct Answer:

10

Explanation:

To find the market demand, you need to add the individual demands of the two consumers at the given price.

Given demand equations:

d1(p)=10−2p

d2(p)=20−8p

To find the market demand (D(p)), you add d1(p) and d2(p):

D(p)=d1(p)+d2(p)

D(p)=(10−2p)+(20−8p)

D(p)=102p+208p

D(p)=30−10p

Now, substitute p=2 into the equation to find the market demand at the price of ₹2:

D(2)=30−10(2)

D(2)=30−20

D(2)=10