Suppose N consumers each have an identical demand curve for a good is given by Q = a - bp, where Q is the quantity demanded, p is the price, and a and b are positive constants
What is the market demand curve? Is the slope (in price) of the market demand greater or less than the slope of each individual demand curve?
The market demand is QM = N • Q = N(a - bp) = Na - Nbp. The slope of the market demand is Nb which is greater (more flat on graph) than the individual demand curve.
Economics
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In the above figure, the aggregate demand curve is AD2, so the long-run equilibrium level of real GDP is
A) $16 trillion. B) $16.5 trillion. C) more than $16 and less than $16.5 trillion. D) None of the above answers is correct.
Economics
The law of supply implies that the supply curve is
A) flat. B) upward sloping. C) downward sloping. D) vertical.
Economics