In a competitive market for tilapia, if two people are both buyers, how does their combined demand affect the market demand curve?

• A. The market demand curve is unaffected by the number of buyers.
• B. The market demand curve is determined by the higher of the two individual demand curves at each price.
• C. The market demand curve is the horizontal sum of their individual demand curves.
• D. The market demand curve is the vertical sum of their individual demand curves.

Answer: (C)

Verified step by step guidance

1. Understand that the market demand curve represents the total quantity demanded by all buyers in the market at each price level.
2. Recall that individual demand curves show the quantity demanded by a single buyer at different prices.
3. To find the market demand curve when there are multiple buyers, add the quantities demanded by each buyer at every given price. This means summing quantities horizontally along the price axis.
4. Mathematically, if buyer 1's demand at price \(P\) is \(Q_1(P)\) and buyer 2's demand at price \(P\) is \(Q_2(P)\), then the market demand \(Q_{market}(P)\) is given by: \[Q_{market}(P) = Q_1(P) + Q_2(P)\]
5. This process of adding quantities at each price is called the horizontal summation of individual demand curves, which results in the market demand curve.