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Question

Suppose there are three consumers in a particular market : Ashok, Mohan and Jay. Their demand schedules are given in the following table :

PriceQuantity DemandedQuantity DemandedQuantity Demanded by Ashokby Mohanby Jay1605524250401334025543010052000

(i) Derive the market demand schedule.

(ii) Suppose Mohan drops out of the market. Derive the new market demand schedule.

(iii) Suppose Mohan stays in the market and another person, Bhim, joins the market, whose quantity demanded at any given price is half of that of Ashok. Derive the new market demand schedule.


Solution

(i) Market Demand Schedule

PriceMarket Demand160+55+24=139250+40+13=103340+25+5=70430+10+0=40520+0+0=20

(ii) When Mohan drops, new market demand schedule is given as:

PriceMarket Demand160+24=84250+13=63340+5=45430+0=30520+0=20

(iii) When Bhim joins the market, the new market demand schedule is given as:

PriceMarket Demand1139+30=1692103+25=128370+20=90440+15=55520+10=30

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