Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I HAVE STRUGGLED to understand the algebra about how the final p=30-(6*q/5) was obtained, please explain EXAMPLE 5.3 Smith and Jones are the only consumers

I HAVE STRUGGLED to understand the algebra about how the final p=30-(6*q/5) was obtained, please explain

image text in transcribedimage text in transcribed
EXAMPLE 5.3 Smith and Jones are the only consumers in the market for lamb chops in a small town in Wales. Their (inverse) demand curves are given by P = 30 - 2Q; and P = 30 - 3Qs where, Q] and Q5 are the quantities demanded by Jones and Smith, respectively, at price P. What is the market demand curve for lamb chops in their town? When we add demand curves horizontally, we are adding quantities, not prices. Thus it is necessary rst to solve the individual demand equations for the respective quantities in terms of price. This yields Q J: 15 (P/2) for Jones, and Q5 = 10 (P/3) for Smith. If the quantity demanded in the market is denoted by Q, we have Q = Q J+ Q5 = 15 (P/2) + 10 (P/3) = 25 - (SP/6). Solving back for P, we get the equation for the market demand curve: P = 30 (6Q/5). We can easily verify that this is the correct market demand curve by adding the individual demand curves graphically, as in Figure 5.16

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Local Disaster Resilience Administrative And Political Perspectives

Authors: Ellen Russell, Ashley D Ross

1st Edition

1135910618, 9781135910617

More Books

Students also viewed these Economics questions

Question

Did the researcher use negative case analysis?

Answered: 1 week ago

Question

Always have the dignity of the other or others as a backdrop.

Answered: 1 week ago