Q: If the price of hot dogs falls from $$1.80 to 0.20$$, what is the percentage increase in quantity demanded by Larry?

$$\frac{25 - 10}{10} \times 100 = 150\%$$

Question 1

Given the demand schedule below, what is the total market demand for hot dogs at a price of $$1.80?

$$\begin{array}{|c|c|c|c|}
\hline
	ext{Price per Hot Dog} & 	ext{Quantity Demanded by Larry} & 	ext{Quantity Demanded by Harry} & 	ext{Total Market Demand} \
\hline
\$$1.80 & 10 & 15 & ? \
\hline
\end{array}$$

Accepted Answer

25

Question 2

At a price of $$0.20 per hot dog, what is the total market demand according to the table?

$$\begin{array}{|c|c|c|c|}
\hline
	ext{Price per Hot Dog} & 	ext{Quantity Demanded by Larry} & 	ext{Quantity Demanded by Harry} & 	ext{Total Market Demand} \
\hline
\$$0.20 & 25 & 30 & ? \
\hline
\end{array}$$

Accepted Answer

55

Question 3

If the price of hot dogs decreases from $$1.80 to 0.20$$, by how much does the total market demand increase?

Accepted Answer

30 units (from 25 to 55)

Question 4

Which of the following best describes the market demand curve for hot dogs based on the data provided?

Accepted Answer

It is the horizontal sum of the individual demand curves of Larry and Harry.

Question 5

Suppose a third consumer, Sally, enters the market and at $$1.80 demands 5 hot dogs, and at 0.20 $$demands 10 hot dogs. What is the new total market demand at $0.20?

Accepted Answer

65

Question 6

If the demand curve for Larry is plotted on a graph with price on the vertical axis and quantity on the horizontal axis, which of the following points would be on his demand curve?

Accepted Answer

$$(1.80, 10)$$ and $$(0.20, 25)$$

Question 7

If the price of hot dogs increases, what happens to the quantity demanded by both Larry and Harry, according to the law of demand?

Accepted Answer

It decreases

Question 8

Which equation correctly represents the market demand $$Q_D as a $$function of price $$P$$, given that $$Q_{D, Larry} = a - bP$$ and $$Q_{D, Harry} = c - dP$$?

Accepted Answer

$$Q_D = (a + c) - (b + d)P$$

Question 9

If Larry's demand for hot dogs is perfectly elastic, what would his demand curve look like on the graph?

Accepted Answer

A horizontal line

Question 10

Suppose the government imposes a price floor of $2.00 per hot dog. What will be the quantity demanded in the market?

Accepted Answer

0

Question 11

If the market demand curve is constructed by horizontally summing the individual demand curves, what does this mean in practical terms?

Accepted Answer

At each price, add the quantities demanded by all consumers.

Question 12

If Harry's demand increases by 5 units at every price, what is the new total market demand at $1.80?

Accepted Answer

30 (10 from Larry + 20 from Harry)

Question 13

If Larry and Harry are the only consumers, and the market demand at $0.20 is 55, what is the average quantity demanded per consumer at this price?

Accepted Answer

27.5

Question 14

If the price of hot dogs falls from $$1.80 to 0.20$$, what is the percentage increase in quantity demanded by Larry?

Accepted Answer

$$\frac{25 - 10}{10} 	imes 100 = 150\%$$

Question 15

If the market demand curve is linear and passes through the points $$(25, 0.20)$$ and $$(10, 1.80)$$, what is the slope of the market demand curve?

Accepted Answer

$$\frac{1.80 - 0.20}{10 - 25} = -0.1067$$

Question 16

If Larry's demand is given by $$Q_L = 30 - 10P$$ and Harry's by $$Q_H = 40 - 15P$$, what is the market demand function?

Accepted Answer

$$Q = 70 - 25P$$

Question 17

If the market demand at $$P = 1.00 is 40 $$units, and at $$P = 0.20 is 55 $$units, what is the average rate of change in quantity demanded per $$1 decrease in price$$ between these two points?

Accepted Answer

$$\frac{55 - 40}{0.20 - 1.00} = -18.75$$

Market Demand and Individual Demand Curves: Hot Dog Market Example

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