Suppose Julia and Zach are the only consumers of milk.Julia's demand for milk is defined as Q^d_Julia = 12 - 3P at prices below $4 and zero for prices above $4.Zach's demand for milk is defined as Q^d_Zach = 10 - 2P at prices below $5 and zero for prices above $5.Market demand when price is $4 is: A) Q^d_Market = 12 - 3P. B) Q^d_Market = 10 - 2P. C) Q^d_Market = 22 - 3P. D) Q^d_Market = 22 - 5P.

Question

Quizplus · Accepted Answer

At a price of $4, Julia's demand is 12 - 3(4) = 0 (since her demand drops to zero at prices above $4), and Zach's demand is 10 - 2(4) = 2. However, to find the market demand at $4, we need to consider the demands at prices below $4, where Julia's demand is positive. Adding Julia's demand (12 - 3P) to Zach's demand (10 - 2P) gives us a combined market demand of 22 - 5P, which is the correct formula for calculating market demand at prices below the threshold where Julia's demand becomes zero.

Suppose Julia and Zach Are the Only Consumers of Milk