Just need help with C, D, E 5. Suppose the quantity of good X demanded by individual 1 is given byX₁ = 10-2Px +0.011₁ +0.4Pyand the quantity of X demanded by individual 2 isX₂ = 5- Px +0.0212 +0.2Pya) What is the market demand function for total X (= X₁+X₂) as a functionof Px, I1, I2, and Py.b) Graph the two individual demand curves (with X on the horizontal axis,Px on the vertical axis) for the case I₁ = 1000, I2 = 1000, and Py = 10.c) Using these individual demand curves, construct the market demand curvefor total X. What is the algebraic equation for this curve?2d) Now suppose I increases to 1100 and I2 decreases to 900. How would themarket demand curve shift? How would the individual demand curves shift?Graph these new curves.e) Suppose Py rises to 15. Graph the new individual and market demand.curves that would result.

The market demand function describes the total quantity of a good or service that all consumers in a…

Answered: c) Using these individual demand…

c) Using these individual demand curves, construct the market demand curve for total X. What is the algebraic equation for this curve?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Just need help with C, D, E

5. Suppose the quantity of good X demanded by individual 1 is given by
X₁ = 10-2Px +0.011₁ +0.4Py
and the quantity of X demanded by individual 2 is
X₂ = 5- Px +0.0212 +0.2Py
a) What is the market demand function for total X (= X₁+X₂) as a function
of Px, I1, I2, and Py.
b) Graph the two individual demand curves (with X on the horizontal axis,
Px on the vertical axis) for the case I₁ = 1000, I2 = 1000, and Py = 10.
c) Using these individual demand curves, construct the market demand curve
for total X. What is the algebraic equation for this curve?
2
d) Now suppose I increases to 1100 and I2 decreases to 900. How would the
market demand curve shift? How would the individual demand curves shift?
Graph these new curves.
e) Suppose Py rises to 15. Graph the new individual and market demand.
curves that would result.

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Step 1: Introduce the concept of market demand function.

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Step 2: c) Construct the market demand curve for total X.

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Step 3: d) Graph the new curve when I1 increases to 1100 and I2 decreases to 900.

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