Question

1) The demand functions for consumers 1, 2, and 3 are respectively Q1 = 75 – P, Q2 = 65 – P, and Q3 = 55 – P. Draw the market inverse demand function

2) The supply functions for firms 1, 2, and 3 are respectively Q1 = P, Q2 = 3P, and Q3 = P – 5. Draw the market inverse supply function

3) The supply and demand functions for a good are respectively QS = P – 16 and QD = 14 –P, with P representing the market price, QS the quantity supplied, and QD the quantity demanded. Determine the quantity traded in the market.

Answer 1

1)

Price	Market Demand
0	195
10	165
20	135
30	105
40	75
50	45
60	15
70	-15
80	-45

2)

Price	Market Supply
0	-5
1	0
2	5
3	10
4	15
5	20
6	25
7	30

3) Qs = P - 16

Qd = 14 - P

At equilibrium, Qd = Qs

14 - P = P - 16

P = 15

At this P, Q = -1

Price	Demand	Supply
0	14	-16
3	11	-13
6	8	-10
9	5	-7
12	2	-4
15	-1	-1
18	-4	2
21	-7	5