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Questions › JNU › JNU SSS 2011 › Q87
1 mark, −0.25Microeconomics › Demand theory and elasticity › Properties of demand and aggregationModerateabout 2 min

JNU SSS 2011 Question 87: Demand theory and elasticity

The market for a good consists of 100 buyers and 50 sellers. Each seller has the same supply function, which is given by Supply =0= 0=0 if price ≤10\leq 10≤10 =p−10= p - 10=p−10 if price >10> 10>10 Each buyer has the same demand function, which is given by Demand =0= 0=0 if price ≥20\geq 20≥20 =20−p= 20 - p=20−p if price <20< 20<20

Market demand function is given by

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The market for a good consists of 100 buyers and 50 sellers. Each seller has the same supply function, which is given by Supply = 0 if price ≤ 10 = p - 10 if price > 10 Each buyer has the same demand function, which is given by Demand = 0 if price ≥ 20 = 20 - p if price < 20 Market demand function is given by (A) Market demand = 2000 - 100p (B) Market demand = 2000 - 100p, if p < 20; and Market demand = 0, if p ≥ 20 (C) Market demand = 2000 - 100p, if p < 2000; and Market demand = 0, if p ≥ 2000 (D) None of the above

Also written as: The market for a good consists of 100 buyers and 50 sellers. Each seller has the same supply function, which is given by Supply = 0 if price <= 10 = p - 10 if price > 10 Each buyer has the same demand function, which is given by Demand = 0 if price >= 20 = 20 - p if price < 20 Market demand function is given by

Demand theory and elasticity has come up 161 times in 7 exams since 2004.

What this question tests

This question is on Properties of demand and aggregation, part of Demand theory and elasticity in Microeconomics.

Homogeneity and adding-up of demand, and when individual demands combine into market demand.

TestStop has 8 past-paper questions on this subtopic.

Practise Demand theory and elasticityMore on Properties of demand and aggregation

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