Dominick Salvatore Schaums Outline of Microeconomics, 4th edition Schaums Outline Series 2006

CHAP. 2] DEMAND, SUPPLY, AND EQUILIBRIUM: AN OVERVIEW 31
2.16 Table 2.18 gives the supply schedules of the three producers of commodity X in the market. Draw, on one set of
axes, the three producers’ supply curves and derive geometrically the market supply curve for commodity X.
Table 2.18
Quantity Supplied (per time period)
P x ($) Producer 1 Producer 2 Producer 3
6 22 42 53
5 20 40 50
4 16 36 46
3 10 30 42
2 0 20 35
1 0 0 25
0 0 0 10
From Table 2.18, we get
Fig. 2-19
This market supply curve was obtained by the horizontal summation of the three producers’ supply curves for
commodity X. (Some qualifications of this procedure will be discussed in Chapter 9.)
EQUILIBRIUM
2.17 There are 10,000 identical individuals in the market for commodity X, each with a demand function
given by Qd x ¼ 12 2P x (see Problem 2.3), and 1000 identical producers of commodity X, each with
a function given by Qs x ¼ 20P x (see Problem 2.12). (a) Find the market demand function and the
market supply function for commodity X. (b) Find the market demand schedule and the market supply
schedule of commodity X and from them find the equilibrium price and the equilibrium quantity.
(c) Plot, on one set of axes, the market demand curve and the market supply curve for commodity X
and show the equilibrium point. (d) Obtain the equilibrium price and the equilibrium quantity
mathematically.
(a)
QD x ¼ 10,000(12 2P x ) cet: par:
¼ 120,000 20,000P x cet: par:
QS x ¼ 1000(20P x ) cet: par:
¼ 20,000P x cet: par: