Question #55655

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:

D1=25-.05P

D2=20-.025P

D3=15-.075P

Where D is the demand and P is the price

Determine :

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

D1=25-.05P

D2=20-.025P

D3=15-.075P

Where D is the demand and P is the price

Determine :

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

Expert's answer

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.

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.

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