We are given the individual demand curves for all of the people that consume Good Y. Which statement is true about the market demand curve for Good Y?
A) The market demand curve is obtained by horizontally summing the individual demand curves.
B) The market demand curve is obtained by vertically summing the individual demand curves.
C) The market demand curve cannot be obtained because information on prices is missing.
D) The market demand curve cannot be obtained from individual demand curves.

Question

Quizplus · Accepted Answer

The market demand curve for Good Y is obtained by horizontally summing the individual demand curves, as it shows the total quantity of the good demanded at each price level in the market. This is because at a given price level, each individual's demand for the good is independent of the other individuals' demand, and therefore, can be summed horizontally to obtain the market demand curve.

We Are Given the Individual Demand Curves for All of the People