Suppose the market demand curve for a good passes through the point (quantity demanded = 100, price = $25). If there are five buyers in the market, then A)the marginal buyer's willingness to pay for the 100^th unit of the good is $25. B)the sum of the five buyers' willingness to pay for the 100^th unit of the good is $25. C)the average of the five buyers' willingness to pay for the 100^th unit of the good is $25. D)all of the five buyers are willing to pay at least $25 for the 100^th unit of the good.

Question

Quizplus · Accepted Answer

The marginal buyer is the buyer who is willing to pay exactly the market price for the good, which in this case is $25 for the 100th unit. This does not imply anything about the sum, average, or minimum willingness to pay of all buyers, just the willingness to pay of the buyer at the margin.

Suppose the Market Demand Curve for a Good Passes Through