Question #71068

In a particular town there are 100 cars and 50 motorcycles. Each car owner has a demand curve for petrol given by: Qdc = 20 – 5p for p ≤ 4 and Qdc = 0 for p > 4. Each motorcycle owner has the following demand function for petrol: Qdm = 15 – 3p for p ≤ 5 and Qdm = 0 for p > 5. Prices are expressed as SR per gallon, and quantities as gallons per week.

Expert's answer

In a particular town there are 100 cars and 50 motorcycles. Each car owner has a demand curve for petrol given by: Qdc = 20 – 5p for p ≤ 4 and Qdc = 0 for p > 4. Each motorcycle owner has the following demand function for petrol: Qdm = 15 – 3p for p ≤ 5 and Qdm = 0 for p > 5.

a) If the price is SR 3, then:

(i) each car owner will buy Q = 20 - 5*3 = 5 gallons of petrol per week.

(ii) each motorcycle owner will buy Q = 15 - 3*3 = 6 gallons of petrol per week.

a) If the price is SR 3, then:

(i) each car owner will buy Q = 20 - 5*3 = 5 gallons of petrol per week.

(ii) each motorcycle owner will buy Q = 15 - 3*3 = 6 gallons of petrol per week.

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