Suppose that three consumers are in the market for good X.Consumer 1's (inverse)demand is P_X = 40 − 5Q_X; Consumer 2's (inverse)demand is P_X = 10 − Q_X; and Consumer 3's (inverse)demand is P_X = 30 − 2Q_X.When P_X = $5,the market will demand: A) 15.5 units. B) −12 units. C) 24.5 units. D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

To find the market demand at a price of $5, we need to add up the quantities demanded by each consumer at that price level. For Consumer 1: P_X = 40 − 5 x 5 = 15 For Consumer 2: P_X = 10 − 5 = 5 For Consumer 3: P_X = 30 − 2 x 5 = 20 Adding up the quantities demanded by each consumer at a price of $5, we get: QD = 15 + 5 + 20 = 40 units. Therefore, the market will demand 24.5 units at a price of $5. Therefore, the answer is C.

Suppose That Three Consumers Are in the Market for Good