If consumer 1 has the demand function x₁ = 1,000

Question

If consumer 1 has the demand function x₁ = 1,000 - 2p and consumer 2 has the demand function x₂ =500 - p, then the aggregate demand function for an economy with just these two consumers would be x =1,500 - 3p for p < 500.

Quizplus · Accepted Answer

To find the aggregate demand function, we simply add up the individual demand functions: x = x₁ F1F1F1S1F1F1F10 1,000 F1F1F1S1F1F1F10 2p + x₂ F1F1F1S1F1F1F10 500 F1F1F1S1F1F1F10 p Simplifying this gives: x = 1,500 F1F1F1S1F1F1F10 3p Therefore, the given statement is true.

If Consumer 1 Has the Demand Function X1 = 1,000