suppose that some market consists of 100 buyers and 10 sellers. Each buyer has an identical individual demand curve,
P=300-3Q
Each seller has an identical individual supply curve,
P=Q
The market demand curve will thus take the form P=a-bQ and the market supply curve will take the form P=cQ+d. In the following questions, I want you to solve for a, b, c, and d.
3. What is the value of the "a" term in the market demand curve?
4. What is the value of the "b" term in the market demand curve?
5. What is the value of the "c" term in the market supply curve?
6. What is the value of the "d" term in the market supply curve?
suppose that some market consists of 50 buyers and 100 sellers. Each buyer has an identical individual demand curve,
P=200-4Q
50 sellers have an identical individual supply curve,
P=Q+40
The remaining 50 sellers have identical supply curves equal to
P=Q+20
The market demand curve will thus take the form P=a-bQ and the market supply curve will take the form P=cQ+d (I want you to focus on the part of the supply curve where prices are such that all sellers are willing to sell the good). In the following questions, I want you to solve for a, b, c, and d.
7. What is the value of the "a" term in the market demand curve?
8. What is the value of the "b" term in the market demand curve?
9. What is the value of the "c" term in the market supply curve?
10. What is the value of the "d" term in the market supply curve?