Question 21
Theory of DemandUse the following information to answer this question. X, Y and Z are the only three consumers of a commodity. Their respective demand schedules for the commodity are as given below:
X: Price (₦) | Quantity (Units)
0 | 20
2 | 15
5 | 10
10 | 0
Y: Price (₦) | Quantity (Units)
0 | 15
2 | 10
5 | 5
10 | 2
Z: Price (₦) | Quantity (Units)
0 | 40
2 | 30
5 | 15
10 | 5
The market demand curve for the commodity cuts the quantity axis when quantity is
- A.75 units
- B.35 units
- C.7 units
- D.not determinable from the schedules except when graphed.
Show the answer and explanation
Answer: A (75 units)
Explanation
The demand curve meets the quantity axis where price is zero. Add the three demands at ₦0: 20 + 15 + 40 = 75 units.