Question

In: Economics

To obtain the market demand curve for a product, sum the individual demand curves

 Question 14

 To obtain the market demand curve for a product, sum the individual demand curves

  •  horizontally.

  •  vertically.

  •  diagonally.

  •  and then average'them.


 Question 15

 When a buyer's willingness to pay for a good is equal to the price of the good, the

  •   buyer's consumer surplus for that good is maximized.

  •   price of the good exceeds the value that the buyer places on the good.

  •   buyer is indifferent between buying the good and not buying it.

  •   buyer will buy as much of the good as the buyer's budget allows.


Solutions

Expert Solution

14. Ans: horizontally

Explanation:

Market demand curve for a product is the horizontally sum of individual demand curve for that product. Market demand for a product refers to the sum of different amount of that product demanded by different individual at a given price.

15. Ans: buyer is indifferent between buying the good and not buying it.

Explanation:

When a buyer's willingness to pay for a good is equal to the price of the good , then the consumer surplus will be zero ( consumer surplus = willingness to pay - Actual pay ) . so in this case , buyer is indifferent between buying the good and not buying it.

Rahul Sunny answered 2 years ago
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