Let's say that the demand side of the market for Blue Soda is comprised of 3 leading agents/individuals: Anthony, Brad, and Claire. Let P be the price of 1 liter of Blue Soda, and Qd be the quantity demanded of Blue Soda in liters. Here are the key points to the problem: - Anthony buys only one liter of Blue Soda if the price of it falls below his choke price of $10. - Brad's demand for Blue Soda is defined by QdB = 5 - P/2 - Claire buys 2 liters if the price is below $5, 1 liter if the price is between $5 and $10, and nothing if the price is above $10. Using this information, please sketch the individual demands and the market demand by aggregating the three agents/individuals. Label the graph clearly. Please make sure to sketch the individual demands first and then sketch the market demand.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
100%

Let's say that the demand side of the market for Blue Soda is comprised of 3 leading agents/individuals: Anthony, Brad, and Claire. Let P be the price of 1 liter of Blue Soda, and Qbe the quantity demanded of Blue Soda in liters.

Here are the key points to the problem:

- Anthony buys only one liter of Blue Soda if the price of it falls below his choke price of $10.

- Brad's demand for Blue Soda is defined by QdB = 5 - P/2

- Claire buys 2 liters if the price is below $5, 1 liter if the price is between $5 and $10, and nothing if the price is above $10.

Using this information, please sketch the individual demands and the market demand by aggregating the three agents/individuals. Label the graph clearly. Please make sure to sketch the individual demands first and then sketch the market demand.

Expert Solution
Step 1: State the information given

There are three leading agents Anthony, Brad, Claire.

P is the price of 1 litre of Blue Soda and the quantity demanded is Qd

Anothony would buy Blue Soda only if the price falls below $10 and will only purchase 1 unit. 

The demand function for Brad is given as 

Q subscript B superscript d equals 5 space minus space P over 2

Claire will purchase 2 units if the price goes below $5 and the price will purchase 1 litre only when the price is between $5 and $10. 



steps

Step by step

Solved in 4 steps with 5 images

Blurred answer
Knowledge Booster
Price Control
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education