Suppose there are three buyers of candy in a market: Tex, Dex, and Rex. The mark

Question

Suppose there are three buyers of candy in a market: Tex, Dex, and Rex. The market demand and the individual demands of Tex, Dex, and Rex are shown in the table below.

a. Fill in the table (gray shaded cells) for the missing values.   

Quantity Demanded

b. Which buyer demands the most at a price of $7? (Click to select)RexTexDex.

c. Which buyer’s quantity demanded increases the least when the price is lowered from $7 to $6? (Click to select)DexRexTex.

d. Which direction would the market demand curve shift if Tex withdrew from the market? (Click to select)No changeTo the rightTo the left.

     What if Dex doubled his purchases at each possible price? (Click to select)No change,To the right,To the left.

e. Suppose that at a price of $6, the total quantity demanded increases from 20 to 30 units. Is this a "change in the quantity demanded" or a "change in demand"?

price per candy Tex Dex Rex Total Q Demanded $ 8 2 2 2 7 4 3 13 6 4 10 20 5 8 14 27 4 10 6 18

Explanation / Answer

(a) At each price, market demand is sum of demand of Tex, Rex & Dex.

(b) When price = $7, Rex demands most (Q = 6)

(c) Quantity demanded by Dex decreases the least (by $1).

(d) If Tex withdraws from market, market demand falls & market demand curve shifts to the left.

If Dex doubles his purchase, market demand rises at every price & market demand shifts to the right.

(e) When quantity changes due to a change in price, it is a change in quantity demanded, as in this case.

Price Demand: Tex Demand: Dex Demand: Rex Market Demand (A) (B) (C) (A) + (B) + (C) 8 2 2 2 6 7 4 3 6 13 6 6 4 10 20 5 8 5 14 27 4 10 6 18 34

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