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Hello, I do not understand how they found the segments and limits: if the price is between 8 and 10, only stan consumes candies. How
Hello, I do not understand how they found the segments and limits: if the price is between 8 and 10, only stan consumes candies. How to find this?? if the price is between 0 and 8, both eat candy. Please explain in more detail. Thanks.
2. (24 points) Demand aggregation Stan and Wendy consume candies. Stan's inverse demand for candies is Ps(q) = 10 - q Wendy's demand is Pw (q) = 8 - 2q a) (8 points) Find their aggregate inverse demand p(q). Be sure to describe all the segments and their limits accurately. Stan's demand is qs(p) = 10 - p Wendy's demand is qw (p) = 4- If the price is between 8 and 10, only Stan consumes candies. In that case, the inverse aggregate demand is 7 q(p) = qs(p) = 10 -p If the price is between 0 and 8, both eat candy. In that case, the aggregate demand is q(p) = qs(p) + qw(p) = 10 - p +4 - ? = 14 - - At a price of 8, the quantity corresponds to q(8) = 10 - 8 = 2 At a price of zero, the quantity is 9(0) = 14 _ 3*0 2 = 14 So we deduce that for a quantity between 0 and 2, the inverse demand is p(q) = 10 - q For a quantity between 2 and 14, the inverse demand is 28 P = COIN 3Step by Step Solution
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