Microeconomics · free preview
From Individual to Market Demand
Market demand is the horizontal sum of every buyer's demand at each price, so its shape inherits the extensive margin of who buys at all and the intensive margin of how much.
1. Adding across buyers
Adding across buyers
2. The two margins of market response
The two margins of market response
3. What summation means for data
What summation means for data
4. Where this road ends
Where this road ends
5. Summing two demands
Buyer one demands Q = 40 - 2P jars of honey and buyer two demands Q = 30 - P. What is the market quantity demanded at a price of 15 dollars, and which buyers are still in the market?
6. The kink in the market curve
With buyer one demanding Q = 40 - 2P and buyer two demanding Q = 30 - P, what happens to the market demand curve at a price of 20 dollars?
7. Three small buyers
Three students buy used textbooks online. Their demands at a price of 8 dollars are 5, 3 and 0 books, with the third student's demand just hitting zero at that price. Compute the market quantity demanded at 8 dollars and write the number.
8. Summing the demands
Buyer one demands Q = 40 - 2P jars of honey and buyer two demands Q = 30 - P. What is the market demand?
9. The high-price region
With the same buyers, Q = 40 - 2P and Q = 30 - P, what does market demand look like at prices between 20 and 30 dollars?
10. Adding three buyers
Three buyers demand 7, 5 and 3 units of a good at a price of 6 dollars. Compute the market quantity demanded at that price, and write the number.
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