There is a fruit seller who has 30 Kgs of apples to be sold and he wants to fix a price so that all the apples are sold. There are three customers in the market and their individual demand functions are given below:
Where D is the demand and P is the price
Market demand equation for the fruit seller (2.5 marks)
Price at which he can sell all the apples (2.5 marks)
Individual demands of each of the three customers (5 marks
1) Qs = 30 Kgs of apples to be, there are three customers in the market, demand functions: D1=25-.05P D2=20-.025P D3=15-.075P The market demand equation for the fruit seller is: D = D1 + D2 + D3 = 60 0.15P Qd = Qs, so: 60 - 0.15P = 30, 0.15P = 30, P = $200 is the price at which he can sell all the apples. The individual demands will be: D1 = 25 - .05*200 = 15 units D2 = 20 - .025*200 = 15 units D3 = 15 - .075*200 = 0 units.