Question

1. individual and market demand suppose that rajiv and simone are the only consumers of pizza slices in a particular market. the following table shows their annual demand schedules: price (dollars per slice) rajivs quantity demanded (slices) simones quantity demanded (slices) 1 30 80 2 15 60 3 10 40 4 5 20 5 0 10 on the following graph, plot rajivs demand for pizza slices using the green points (triangle symbol). next, plot simones demand for pizza slices using the purple points (diamond symbol). finally, plot the market demand for pizza slices using the blue points (circle symbol). now, suppose that simones twin - brother, who likes pizza just as much a simone, moves to the area, adding another consumer in the market. as a result, there will be a the market demand curve because there will be a change in quantity demanded

Explanation:

Step1: Plot Rajiv's demand

For price = 1, quantity demanded by Rajiv is 30. Plot the point (30, 1) using green - triangle. Repeat for other price - quantity pairs from Rajiv's schedule: (15, 2), (10, 3), (5, 4), (0, 5).

Step2: Plot Simone's demand

For price = 1, quantity demanded by Simone is 80. Plot the point (80, 1) using purple - diamond. Repeat for other price - quantity pairs from Simone's schedule: (60, 2), (40, 3), (20, 4), (10, 5).

Step3: Calculate market demand

Market demand at each price is the sum of Rajiv's and Simone's quantity demanded. For price = 1, market quantity demanded = 30 + 80=110. For price = 2, market quantity demanded = 15 + 60 = 75. For price = 3, market quantity demanded = 10+40 = 50. For price = 4, market quantity demanded = 5 + 20=25. For price = 5, market quantity demanded = 0 + 10 = 10.

Step4: Plot market demand

Plot the points (110, 1), (75, 2), (50, 3), (25, 4), (10, 5) using blue - circle.

Step5: Analyze the effect of new consumer

When Simone's twin brother, who has the same demand as Simone, enters the market, at each price, the quantity demanded in the market will increase by the amount that Simone demands. This is a right - ward shift of the market demand curve because there is an increase in quantity demanded at every price level.

Answer:

The market demand curve will shift to the right.