Derivation of the market demand curve.

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Chapter 4, Problem 8QE

To determine

Derivation of the market demand curve.

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How is the market demand curve determined? by subtracting the individual demands curves from the supply curve by horizontally summing the individual demand curves by vertically summing the individual demand curves by averaging all the individual demand curves

The following graph plots a supply curve (orange line) for several sellers in the market for motor scooters in State College, a university town in Pennsylvania. Each seller has a single motor scooter for sale. The market price of motor scooters is given by the horizontal black line at $70. Each rectangle on the graph corresponds to a particular seller in this market: blue (circle symbols) for Shen, green (triangle symbols) for Valerie, purple (diamond symbols) for Antonio, tan (dash symbols) for Caroline, and orange (square symbols) for Dmitri. (Note: The name labels are to the right of the corresponding segment on the supply curve.) Use the rectangles to shade the areas representing producer surplus for each person who is willing to sell a motor scooter at a market price of $70. (Note: If a person will not sell a motor scooter at the market price, indicate this by leaving their rectangle in its original position on the palette.) PRICE (Dollars per motor scooter) 160 140 120 100 80 60…

How does a supply curve differ from a demand curve and at what point do they intersect?