The total/aggregate market demand for rubber erasers can be segmented into two components. The first component is the demand for rubber erasers by art students. This demand is given by Qa 10,000-250P. The second component is the demand for rubber erasers by all other purchasers. This demand is given by Qo=15000-500P. a) Draw the demand curve for art students, the demand curve for other purchasers and the aggregate demand curve b) Derive the algebraic expression for the aggregate demand curve. c) If the equilibrium price is $20, determine the consumer surplus for art students.

The total/aggregate market demand for rubber erasers can be segmented into two components. The first component is the demand for rubber erasers by art students. This demand is given by Qa 10,000-250P. The second component is the demand for rubber erasers by all other purchasers. This demand is given by Qo=15000-500P. a) Draw the demand curve for art students, the demand curve for other purchasers and the aggregate demand curve b) Derive the algebraic expression for the aggregate demand curve. c) If the equilibrium price is $20, determine the consumer surplus for art students.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The total/aggregate market demand for rubber erasers can be segmented into two components. The first component is the demand for rubber erasers by art students. This demand is given by $ Q_a = 10,000 - 250P $. The second component is the demand for rubber erasers by all other purchasers. This demand is given by $ Q_o = 15,000 - 500P $.

a) Draw the demand curve for art students, the demand curve for other purchasers, and the aggregate demand curve.

b) Derive the algebraic expression for the aggregate demand curve.

c) If the equilibrium price is $20, determine the consumer surplus for art students.

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