Market demand is determined by:

• A. the marginal cost of production
• B. the equilibrium price set by the government
• C. the supply decisions of producers
• D. the sum of all individual consumers' quantities demanded at each price

Answer: (D)

Verified step by step guidance

1. Understand that market demand represents the total quantity of a good or service that all consumers in a market are willing and able to purchase at various prices.
2. Recognize that market demand is not directly determined by producers' supply decisions or marginal cost of production, nor by government-set prices, but rather by consumers' behavior.
3. Recall that individual demand curves show the quantity demanded by a single consumer at different prices.
4. To find the market demand curve, horizontally sum the quantities demanded by all individual consumers at each price level. This means adding up the quantities demanded by each consumer for a given price.
5. Express this mathematically as: \(Q_{market}(P) = \sum_{i=1}^{n} Q_i(P)\), where \(Q_i(P)\) is the quantity demanded by consumer \(i\) at price \(P\), and \(n\) is the total number of consumers.